Lloyds Banking Group Mobilizes 800 AI Models to Slash Costs

The U.K.-focused financial services provider aims to achieve a return on tangible equity of greater than 18% in 2028 and about 20% in 2030, according to a frequently asked investor questions file released Thursday (July 30).

Part of Lloyds Banking Group’s strategy is cost and capital discipline. Between 2022 and 2026, the bank gained costs savings of 2 billion pounds (about $2.7 billion) by improving productivity and efficiency, modernizing technology, digitizing more interactions and rationalizing its office footprint, according to the FAQ file.

Lloyds Banking Group expects to have a cost:income ratio of less than 50% in 2026 and to reduce that ratio to less than 45% in 2030, with year-over-year reductions, according to a Thursday news release.

“We’ve been delivering against a clear strategy to enhance our capabilities, deliver new propositions for customers, and position ourselves to benefit from new technologies,” Charlie Nunn, executive director and group chief executive at Lloyds Banking Group, said during a Thursday earnings call. “We have significantly modernized our infrastructure, actively unlocking our legacy data estate and technology.”

Lloyds Banking Group now has about 22 million mobile app users, 7 billion annual digital logons and 800 AI models live, according to a 2026 half year results and strategy update released Thursday.

The bank expects to see an AI productivity benefit of 0.4 to 1.2 percentage points per year over the next decade, according to the update.

In its retail business, Lloyds Banking Group plans to scale agentic customer journeys to improve the customer experience, new customer growth efficiency and cost-to-service, per the update.

In its commercial business, the bank is using AI-augmented tooling to enhance its relationship manager productivity and enhanced digital and AI-enabled offerings to deepen its business and commercial banking (BCB) relationships, the update said.

Lloyds Banking Group’s efforts in the commercial business include scaling its auto credit decisioning and new broker portal; offering simple, flexible payment solutions for small businesses; and providing embedded finance solutions to third parties, per the update.

Nunn said during the earnings call that Lloyds Banking Group has hired about 11,000 technology and data staff since 2021.

“These actions mean that our organization is better equipped to deliver significant change at pace,” Nunn said. “This has created the platform for increased innovation, driving clear benefits for both customers and the group.”