Lloyds Banking Group is about to agree a £1.3bn contract with IBM which will see around 1,900 jobs moved to the company.
The seven-year deal is designed to cut almost £760m in costs and make the bank more adaptive to changes in technology.
The Financial Times reports the Lloyds Trade Union has warned its 35,000 members that staff transferred to IBM would remain with the company for a year before many being made redundant within four years.
The union says the deal was criticised by “senior managers and head of functions in IT, concerned that critical systems which underpin the bank’s major payment, treasury trading, settlement and digital services are being outsourced to a third party to eventually be run offshore.”
It adds: “Even the bank admits that the migration of the accounting details of 20 million customers on to a private cloud to be run by staff based offshore could ‘weaken existing security controls and adversely effect the confidentiality and integrity of bank data’.”