Lloyds Banking Group said today it had invested in a fintech company whose tech it plans to roll out next year, in the bank’s latest bid to enhance its digital presence.
Lloyds has invested £11m for a 10 per cent stake in Thought Machine, which is building a new cloud-based platform aimed at replacing current online banking systems.
Thought Machine’s core product, Vault, can run any type of banking product and aims to simplify outdated online systems without compromising security and reliability.
The bank said the purchase is in line with its strategic review, announced in February, which put digitisation at the heart of its ambitions for the next three years.
On Tuesday the bank confirmed plans to cut 6,000 jobs and create 8,000 new ones as part of a huge shift towards digital transformation.
Lloyds said it has worked with Thought Machine since 2017 to test the concept and said the technology could provide customers with more tailored products when it is rolled out next year.
The investment reflects growing competition from smartphone-based banking services such as Monzo, Starling and Revolut. In September Lloyds announced the closure of 15 branches as customers move away from traditional brick and mortar banking to online alternatives.
Zak Mian, group director of transformation at Lloyds, said: “A key part of our recently launched three-year strategic plan is applying technology innovation to meet our customers’ evolving needs.
“I’m really excited to work with the Thought Machine team to explore ways to simplify and enhance our IT architecture and helping on our journey to make banking easy and simple for customers.”
Paul Taylor, Thought Machine founder and chief executive, said: “We are delighted to announce this partnership with Lloyds.
“Lloyds has shown a deep commitment to embrace the opportunities that new technologies can bring in improving customers’ banking experience and it is a pleasure to take this partnership forward.”