Written evidence submitted by Lloyds Banking Group (DIG0063)
Thank you for inviting Lloyds Banking Group to provide oral evidence to the Committee on Tuesday 12 January. This is an important area and we very much welcome the Committee’s focus on the role of Government and the private sector in addressing the skills gap.
As there were a number of initiatives, which we were unable to disclose on the day as they were subject to an embargo, we agreed to send an additional paper. We also wanted to share where relevant details of our wider Helping Britain Prosper Plan.
1.1. Lloyds Banking Group is committed to mitigate digital exclusion and ensuring everyone in the UK has the motivation and skills needed to benefit and prosper from the internet. As part of our Helping Britain Prosper Plan, we have introduced a specific target of supporting 20,000 colleagues helping other people and organisations to use the internet to improve digital skills and financial capability by 2017. We have established a benchmark of the digital and financial capabilities of business, charities and consumers through our UK Business Digital Index and the Consumer Digital Index. This submission outlines the specific challenges highlighted through our research and extensive work with partners that the Digital Strategy should seek to address, and how the Government can best work with the private sector to achieve its ambitions.
1.2. We see a key part of our role as providing insight and supporting policy makers with our own behavioural data as well as the survey data we generate through the UK Business Digital Index and the Consumer Digital Index. We have supported government through the Digital Inclusion Delivery Board now the Digital Engagement team at the Digital Economy Unit.
1.3. Our scale means we have a presence across communities in the UK including Scotland. We use our colleagues network to provide volunteer support to national schemes and partner with organisations like the Tinder Foundation and Go ON UK to support local plans to improve digital skills. Through our work on the Digital Inclusion Delivery Board we have also partnered with the Society of Chief Librarians to support digital skills teaching in Libraries.
1.4. We would encourage the Government to use its Digital Strategy to underpin, reinforce and enable existing priorities across Government and to avoid the creation of a strategy that sits in isolation from and competes with other Government priorities. The digital strategy needs to be embedded in the overall Government strategy to deliver its existing objectives, and potentially accelerate them.
2.1 Lloyds Banking Group is the only bank willing to hold itself publicly to account for the ways in which it promotes prosperity. Behind the targets of our Helping Britain Prosper Plan is the central idea that our scale, knowledge, experience, relationships and people impose a duty and provide an opportunity - unique to LBG - to help Britain prosper.
2.2 The Group accounts for one-in-four of all new mortgages for first time buyers. In addition our lending to SMEs has increased every year for the past four years, despite a downward trend across our industry. Our support for the mid-sized company sector is also growing, helping to support employment and exports.
3.1. As a Group we are committed, through our Helping Britain Prosper Plan, to take a lead in financial inclusion by improving the financial health and resilience for low income customers through better access to banking and building their money management capability through education. We’re aware that are 1.5 million adults in the UK don’t have a bank account. And for those families who are not fully utilising banking services they can find themselves having to pay a ‘poverty premium’ of up to £1300 for their essential goods and services.
3.2. Many of our customers who have a basic bank account fall into the category of being ‘underbanked’ and by this we mean they have a bank account but they don’t use all of the products and services available to them.
3.3. We have a dedicated team in Lloyds Banking Group that works across a wide number of areas to fully understand the critical issues that affect the lives of people who are on low incomes or at risk of financial exclusion and they are instrumental in working together with our product teams to create solutions to tackle those issues. We have also built an extensive network of external contacts to ensure we understand the changing environment together with the needs and pressures these customers face. We fully expect and are prepared to be challenged on how and what we are doing.
3.4. There are a number of ways we are already addressing financial inclusion. Since 2010, we’ve given training to over 2000 of the people who help individuals in their local communities manage their personal finances. Through the Group’s Money for Life Programme, we’re providing community groups – such as Housing Associations, youth charities and the Citizen’s Advice Bureau – with the skills and knowledge to help their customers learn budgeting skills and understand financial products and services. We’ve seen thousands of people in our communities benefit from the confidence this brings.
3.5. We’ve extended our basic bank account provision to make it better for customers, giving them full ATM access, full counter access and the ability to open accounts in branch and online. And for all colleagues, we’ve created a new annual financial inclusion-training module to ensure it’s at the heart of everything we do. We’ve also developed specific training for our branch colleagues to help them recognise vulnerable customers, enabling us to tailor the support we give them to help them with their banking needs and giving them confidence that we will treat them fairly.
3.6. We also continue to support the growth and profile of the UK Credit Union sector by awarding £4m through the Lloyds Banking Group Credit Union Development Fund, working with branches to signpost customers to local credit unions if we are unable to help them with one of our own products and encouraging colleagues to volunteer their time and skills. Lloyds Banking Group has publicly committed to be at the forefront of the financial inclusion agenda and there is a huge amount of enthusiasm to help customers make the most of their money. Even though we have already achieved much to support our vulnerable customers we recognise there is a lot more to do for people at risk of financial exclusion.
4.1. In terms of Digital, we are the UK’s leading bank with over 11.5 million active online customers and the UK’s largest mobile service with more than 6.5 million active mobile banking customers. Over the last three years we have invested over £750m in digital and will continue to invest £1bn in the digital transformation of our business over the next three years. Our five star rated app and mobile optimised site now account for over 60 per cent of our total logon volumes. Our customers logged on to our secure sites 1.6 billion times over the last 12 months. We are the first UK bank to appoint a Group Digital Director - Miguel-Ángel Rodríguez-Sola and to introduce a digital-specific graduate training scheme.
4.2. As part of our 2015 Helping Britain Prosper Plan, Lloyds Banking Group has made the significant commitment to deliver over 20,000 Digital Champions by 2017, which equates to around one in every four colleagues. Champions are committed to helping at least two individuals or organisations use the Internet to improve digital skills and financial capability each year. There are already over 11,000 Digital Champions across the Group, with numbers growing all the time. We have partnered with the Tinder Foundation, who help the Group with developing Digital Champions’ capabilities and training and we provide access to a list of online centres in the region where our colleagues can volunteer to help clients.
4.3. Lloyds Banking Group is involved in the Government’s Digital Inclusion Delivery board, supporting the delivery of actions in the Digital Inclusion Strategy through partnership between Government and the public, private and voluntary sectors to reduce digital exclusion. As a bank we work closely with digital skills charity Go ON UK, of which we are a founder partner. We agreed a memo of understanding where Lloyds Banking Group agreed to support Go ON with over 50 initiatives from recruiting digital champions to leading 2 Go ON local projects, Go ON Croydon and Go ON Lewisham. We also supported producing the Go ON UK Digital Exclusion Heatmap. The Heatmap is a mapping tool which aims to provide policy-makers and those working in the digital skills and inclusion sector, with the insights to help drive engagement, action and funding where it is most needed.
4.4. Our Business Digital Index, which looks at digital skills for SMEs and Voluntary, Community and Social Enterprises suggested, in 2015, that the greatest opportunities were in the voluntary sector as it had a relative lack of support compared to the SME sector. One of the most surprising findings was that the voluntary sector suffers from a lack of motivation to improve their digital skills.
5.1. Lloyds Banking Group undertakes an annual survey of 2,000 of our small business customers to create the Lloyds Bank UK Business Digital Index (www.lloydsbank.com/businessdigitalindex), which measures the use of, and attitudes towards, digital technology among small businesses and charities.[1] Now in its third year, the survey shows that there is clearly some evidence of success, particularly in certain regions, in the development of digital maturity and there is also encouraging improvement in SMEs’ basic digital skills. The gains are considerable: Digitally capable SME’s are three times as likely to report an increase in turnover than their non-digitally capable peers and charities are twice as likely.
5.2. The Lloyds Bank UK Business Index published in April 2015:
5.3. There are number of basic, readily-available steps that small businesses can take to expand distribution beyond the local community they operate in and to respond to the fact that customers are increasingly moving online; whether establishing an email address, Facebook page or Twitter handle to communicate with customers, or a simple page on Yell to ensure their contact details are easily accessible. Our report highlights that attitudes across businesses and charities are still a barrier to doing more online, and that the charity sector in particular is being left behind in the adoption of digital. It is clear that there is a real opportunity to support charities in developing their digital capabilities and to promote the benefits of digital to all SMEs in an increasingly global market place. Identifying and motivating small businesses and charities to understand the benefits to ensure that they want to invest in digital skills is key.
5.4. This is particularly true of small businesses, for whom there are clear opportunities to invest time in digital in order to save time. Of the businesses we surveyed, 30% said that saving time would be a key factor for them, but short term time pressures and attitudes are a barrier to investment of time in digital development.
6.1. Lloyds Banking Group worked in partnership with the Government Digital Service last year to conduct a review and audit of support arrangements for small businesses and charities across the UK. The review found that there was a lack of awareness and motivation to seek support. Once this support was found, it was shown to be fragmented and disproportionately weighted to certain regions of the UK, with 50% of all events in London boroughs and therefore the rest of the UK under supported. The Government needs to put in place a more transparent support arrangement which is proportionate and more equitably spread across the UK, teamed with a programme to raise awareness of what support is available.
6.2. It is worth noting that evidence has shown that small businesses want to learn from people they know and trust and businesses can best share ideas and learn from each other (if not necessarily competitors). A Lloyds Bank and Tinder Foundation pilot scheme in the north east of England showed that the greatest benefits came from collaboration between small businesses and that face to face contact resulted in the greatest upskill.[2]
7.1. Lloyds Banking Group has also benchmarked the digital and financial capability of UK customers through the Lloyds Bank UK Consumer Digital Index 2016, which looks at the actual digital and financial behaviour of one million consumers.
www.lloydsbank.com/consumerdigitalindex
7.2. The Lloyds Bank UK Consumer Digital Index published Jan 2016 (embargoed until 23rd Jan 2016) shows:
8.1. Partnerships are a key driver to helping those without basic digital skills. At Lloyds Banking Group we have the following examples of how partnerships are driving positive and innovative solutions across the private, VCSE and public sector. We strongly believe the Go ON Local model works. Go ON UK has brought together a wide range of sector partners together with local partners to get behind a regional call to action.
8.2. GO ON Croydon is a great example of a coordinating organisation with specific expertise working with partners at a local level to dramatically improve digital capabilities. The scheme brings together a broad range of national organisations, such as all of the Go ON UK board partners, local businesses, community and faith groups, charities and voluntary sector organisations including the Go ON UK Board partners, Croydon Tech City, Croydon College, Jobcentre Plus, Croydon MIND, Happus, Boxpark, the Citizens Advice Bureau, L&Q Housing, LBS Older Peoples’ Services and many more. The aim is to improve the lives of Croydon residents by showing them how they can benefit from gaining better digital skills and embracing technology. Lessons from this project will be used to inform further local partnerships.
8.3. Go ON UK and driving a local co-ordinated cross sector partnership approach. The solution is a combination of dedicated Digital Zones in branch, inspiring audiences and signposting to support but more importantly also in parallel 6 “deep dive” projects looking at solutions our more vulnerable and most in need members of society.
8.3.1. A number of key projects have been set up or are planned based on local and user needs in consultation with Croydon and Lewisham borough councils. Go ON UK will work with and support a range of partners to identify and address the common causes of digital exclusion for these specific groups. Over its lifetime each project will track participant numbers and evaluate the change in participants’ confidence levels, demonstrating the value and benefits that can be gained from having greater Basic Digital Skills and in some cases financial inclusion.
8.3.2. Deep Dive Project Aims (NB not all projects run in both boroughs)
8.3.2.1. Specific Community
• Working with targeted groups and individual residents in a particular location
• Increased digital inclusion among residents taking part
• Greater level of community engagement
8.3.2.2. Older People
• Working with older peoples charities as well as the people themselves
• Increased digital inclusion
• Reduction in social isolation
• Improvements in health and wellbeing
8.3.2.3. Digital Connect - Young People (NEETs) and SMEs (Lloyds Banking Group)
• Improving employment outcomes for the young people
• Increased self-confidence
• A positive impact on health and wellbeing
• SMEs will enhance their BDS which will enable business growth
8.3.2.4. People with Mental Illness, People in Poverty, Homelessness
• Improved levels of financial inclusion
• Increased levels of community engagement
• Improved health and wellbeing
• Increased social inclusion
8.3.2.5. People with sensory impairments
• Increased levels of digital inclusion
• Increased confidence
8.3.2.6. Financial Inclusion for Young People (Lloyds Banking Group)
• Provides 16-25 year olds with basic digital skills and financial inclusion/awareness training
• Empowers young adults aged 16 – 25 years to gain financial control by providing them with money management knowledge, skills and confidence
8.3.3. Legacy
8.3.3.1. After the project implementation there will be a lasting legacy for both boroughs. Collateral and reports will be held on Go ON Local (see below) to enable other organisations across the UK to replicate and emulate successes, learn lessons from the implementation around what works for hard to reach communities (and equally what doesn’t work) and apply them within their own projects.
8.3.4. Go ON Local
8.3.4.1. Go ON Local Beta is an online community toolkit and collaborative platform designed to build on the successful Go ON UK North West and North East digital skills programmes.
8.3.4.2. It provides useful resources for organisations and individuals to help others get the Basic Digital Skills they need.
8.3.4.3. Go ON Local Beta has been developed to offer every organisation, local council, housing association and skills training provider amongst others, online access to essential resources and to provide a platform for people to connect, share and promote best practice.
8.3.4.4. The resources available on Go ON Local Beta are divided into various categories to help individuals and organisations get involved and take action to help people get the Basic Digital Skills they need in their local community.
8.3.4.5. Resources range from tips on how to get started, whether that’s helping a friend or neighbour or beginning a campaign, planning digital skills activities, how to measure and evaluate your work, and how to help small businesses and organisations amongst others.
8.3.4.6. Go ON Local Beta will also encourage others to upload resources they find most helpful, to encourage networking and the sharing of best practice.
8.3.4.7. Go ON would like people to use Go ON Local Beta for their own benefit, to collaborate and network with similar people and organisations, and share what has worked for them.
8.4. Lloyds Banking Group has also provided an independent baseline measure of basic digital skills to be able to monitor progress in the region over a 12 month period.
8.5. LBG supporting Government and Digital Services advisory board:
8.5.1. Lloyds Banking Group’s involvement in the Government Digital Services board has led to innovative partnerships – in our case with the Society of Chief Librarians and Halifax. Government’s convening power can promote and incubate these kinds of partnerships between the voluntary and private sector.
8.5.2. As with businesses, research tells us consumers want to learn from people like them. From a recent study we found 93% of people preferred to learn with people like them. Those who are not online will often have a family member; neighbour or friend who is, so we support an approach, which encourages these people to offer skills, based volunteering in the community. We also are aware some of our more vulnerable or hard to reach audiences prefer to get support from their local community centres rather than a banking hall. Our internal programme, which supports the Governments Digital Friends initiative with Lloyds Digital Champions, aims to support the community but also gets our own employees out of branches and into places where local people seek to gain skills.
8.5.3. We would highlight, for instance, our partnership between Halifax and the Society of Chief Librarians, which seeks to magnify the impact of the Government’s drive to get WiFi to 98% of libraries by March 2016. The programme is aimed at helping the almost six million adults in the UK who have never used the internet to get online. Over 2,000 Halifax members of staff who have pledged to be Digital Champions will be available to support free ‘IT Taster Sessions’ in all libraries across England, Wales and Northern Ireland. Launched in Battersea library in London this week, the programme is delivered as part of the Society of Chief Librarians Universal Digital Offer for Libraries. This partnership emerged from the government’s Digital Inclusion Advisory Board – demonstrating government’s convening power. The Tinder foundation have trained all of our champions and we signpost to all their 5000 community centres for all of our colleagues.
8.6. Lloyds Banking Group supporting the Charitable and VCSE sector
8.6.1. Lloyds Banking Group has raised the awareness of the benefits of the internet by supporting the existing campaigns of practitioners and building the capability and traffic to the specialist and local community centres. For example every year, Lloyds has supported the Tinder Foundations Get Online week and ChildNet’s internet safety campaign for young people.
8.6.2. We also worked with lead practitioners to develop the training for our digital champions. By working with the tinder foundation, the training is now available to all 75,000+ colleagues. We have made toolkits to support this sector and signpost to them on all of our customer assets.
8.6.3. We also signpost all of our colleagues to the postcode database so they can easily find their local library and community centre to support with volunteering and/or signpost customers to local ongoing training and support. We have provided training available via learnmyway.com available to all community centres to reach the audiences, which wouldn’t typically expect to receive that training via a bank.
8.6.4. The England and Wales foundation is also piloting a scheme with the tinder foundation where digital skills are including as an option when applying for a grant and there are a number of other projects where we are supporting the SME and VCSE sector gain much needed digital skills.
8.7. Lloyds Banking working in collaboration with the Private sector
8.7.1. Lloyds Banking group has also worked in collaboration with other private sector organisations. Primarily we work with Go ON partners to drive local and coordinated activity, such as the provision of “Digizones” in our branches alongside EE, Argos and the post office.
8.7.2. Lloyds Banking Group is taking the insight from the Lloyds Bank digital index (www.lloydsbank.com/businessdigitalindex) and have created a Digital Connect Pilot. This is collaboration between Lloyds Banking Group, Go ON UK, Seetec and Accenture and has been created to improve the Digital skills and capabilities of SMEs, Charities and young people not in education or employment. The pilot is part of Go ON local and targets SMEs, Charities and young people in the London boroughs of Croydon and Lewisham.
8.7.3. The main aim of the project is to test the effectiveness of the delivery model in connecting Small to Medium businesses (SMEs), Charities and young people to build Basic Digital Skills.
8.7.4. The pilot has the following objectives:
• To run Digital workshops for SMEs and Charities to help organisations understand how they can use Digital to better achieve their mission (up to 160 SME’s and charities to attend the workshops)
• To train 16-24 year olds Not in Education, Employment, or Training (NEETs) to build digital skills (100 young people with 50 hours of digital and employability training)
• To offer SMEs and Charities the opportunity to host a young person for a 5 week work placement (free)
• To place young people into temporary or permanent employment opportunities with SMEs or Charities who have digital related roles (at the end of the pilot)
• Through the interventions, measure the change in Digital ‘maturity’ and capability across all the targeted demographic groups.
8.7.5. This is a pilot project and following its conclusion, the success of the pilot will be evaluated and a case study produced. This will then be used to help inform a scale up strategy to determine how the project can be replicated nationally.
9.1. Although both equally crucial, there needs to be a differentiation between digital literacy and digital skills. Whilst every citizen ought to be furnished with digital literacy to enable them to access services and products online, people within industry are needed to build and develop those products and services. With indications that there will be a significant shortfall in workers with appropriate digital skills to fill these roles, this poses an additional challenge.
In addition to the verbal evidence we believe and conclude:
January 2016
[2] Tinder Foundation, Supporting Small Businesses with Digital: A Pilot Project, http://www.tinderfoundation.org/sites/default/files/research-publications/supporting_small_businesses_with_digital.pdf