Lloyds expects to save $901M through tech in 2024

Lloyds Bank is looking to modernize its platform through AI and beefing up its tech team. 

“By digitizing end to end and modernizing our technology estate, we’re increasing efficiency benefits as we scale,” Chief Executive Charlie Nunn said during the bank’s second-quarter earnings call today. The bank has digitized nearly 45% of its customer journeys like onboarding and loan applications, he said. 

The $1.1 trillion bank is also developing AI for more efficient operations and has nearly 800 uses in the pipeline, Nunn said. 

“Most of them aren’t generative AI, but they are AI models that we’re using to make better decisions, optimize efficiency in the way we manage the bank today and manage risk better,” Nunn said. 

The bank reported that it expects to save 700 million pounds ($901 million) in 2024 through deployment of tech and automation.  

Lloyds has hired 1,500 technology and data specialists since the start of the year to develop the technology, Nunn said, adding that more than 4,000 such personnel have been hired in the past 4½ years. 

THE BIGGER PICTURE: Other European banks, including BNP and Deutsche Bank, are also beefing up their tech teams to develop and deploy AI. 

BNP has nearly 800 employees working in data science and technology-related roles, while Deutsche Bank has hired 900 employees in business growth- and technology-related fields this year.  

BY THE NUMBERS: In Q2, Lloyds reported: 

• Net income of $5.1 billion, down 8% year over year; 

• Total costs of $2.9 billion, up 3% YoY; and 

• Cost-to-income or efficiency ratio of 57% in Q2, compared with 50% in Q2 2023. 

NOTEWORTHY: The London-based bank decommissioned nearly 20% of its legacy applications and is in the process of moving its operations to the cloud, according to the earnings report. 

It is also looking to deploy tech to provide personalized services to its customers to increase organic growth opportunities. 

MARKET REACTION: Lloyds Bank shares were trading up 1.6% at $60.64 at market close on Thursday. Lloyds Bank has a market capitalization of $37.7 billion. 

Editor’s Note: All figures converted to USD. 

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