Reuters reported that Barclays is on the cusp of revamping its back-office operations, which the newswire said is part of an effort to “ringfence” retail business away from what might be deemed riskier operations.
As part of that effort, the bank has fashioned a new company that will be part of a unit focused on serving investment banking and retail efforts.
Under the terms of ringfencing, lenders in the United Kingdom that have operations across the continuum of retail, commercial and investment banking have to keep those units separate. But the service model stretching across all of those disparate parts dictates that “critical support functions” can and will operate without interruption and with some streamlining of back-office functions.
The back-office revamp will mean that the new company, known within the firm as ServCo, will have ripple effects across a 17-country back-office presence and across the 10,000 people employed by the bank in those functions. The creation of ServCo will combine operations in India and South Africa, centered on data and technology support.
As for a price tag associated with the ringfencing efforts, the newswire stated that the creation of ServCo will absorb the bulk of the $1.3 billion that Barclays has estimated it will cost, in total, to pay for the ringfencing compliance initiatives.