Tech disruption as a day job - Lloyds Banking Group CEO Charles Nunn on AI, digital transformation, and why his bank just isn't playing the same game as upstart fintechs

Disruption of our industry with technology is what we do.

As covered in diginomica passim, Lloyds Banking Group has been on an ongoing digital transformation journey that dates back over a decade and has seen a number of multi-year, multi-billion pound strategies in play. That’s paid off, argues Group Chief Executive Charles Nunn: 
We increased the size of our digital bank by 50%, and we've got now about 23 million digitally active retail customers looking on 7 billion times a year, with the biggest digital service in the UK hired 9,000 new engineering and tech colleagues to bring the capabilities inside the organization. 

Now, it’s 2026, so, of course, the topic du jour is AI, We’ve seen many organizations stake a claim to having AI credentials in place long before the current hype cycle, and Lloyds joins their ranks as Nunn says:

When we think about AI, we often characterize it as digital and AI. And the reason I say that is, we, for example, have had 800 AI models live before generative AI came around. It's a big part of our operating model. And obviously, when you think about digital and digital technologies, digital and AI have been a disruptive force in this industry since I started transforming this industry on the trading floors in the early 1990s, which is where I started digitizing trading floors and exchanges.

Lloyds today is at the forefront of AI and agentic AI, he argues:

In terms of generative AI and Agentic AI, we've taken a pretty narrow definition so that we can communicate with our shareholders, with our customers, around what we are doing. We are, and we will be, a leader in the deployment of those technologies as well.

And there are tangible, bottom line success stories to point to, he says:

We talked, for example, last year about having deployed 50 scaled use cases across tens of thousands of colleagues in customer experiences that delivered in-year benefits of £ 50 million. The same number for this year is £100 million. If you scale those and multiply them by five years, you get into the billions.

Different this time...

Lloyds will stay focused on defining technologies narrowly so people can understand them, he insists. But while digital transformation has been a long-running theme in the financial services sector, this time it’s different:

I spent 30 years trying to do certain things for customers and to differentiate experiences and the technologies didn't enable us to do that fully, These technologies are enabling us to do things we haven't been able to do for the last 30 years.

Nunn sees benefits being realized in two ways, with the first being around differentiating what we do and enabling new growth:

So, for example, we're launching three customer-facing experiences this year. One is around taking investment advice to the mass market, using agents to provide very personalized targeted conversational support to customers to take more risk in their portfolios. That's done in a very safe way in a regulatory sandbox with the FCA (Financial Conduct Authority), but it's going to be for the first time in my career, you could really talk about bringing advice to the people that most needed it bluntly, i.e., not people that look like [bankers]  that have the experience to do that themselves will have a good conversation with an IFA (Independent Financial Advisor).

We've got another experience launching, which is around being able to have a conversation with your money and get advice on how to make better decisions around your spending, savings, use our loyalty and rewards better, protect yourself from fraud and that's going to start to really give a different level of experience around our everyday banking, which is so core to our differentiation, our personal current accounts and our positions in the UK. We see a huge opportunity to take that to our Mortgage business, our Homes business, our Transport business, into the personal current accounts.

The second benefits area centers on efficiency, he says:

What we tend to talk about is better, faster, cheaper, which is, how do we really support our colleagues and transform how we operate as an organization?  Technology, again, continues on the journey we've been on around using digital and technology to make ourselves more efficient, better at making risk decisions and better at deploying and using our capital. And I just think that runway is going to continue with this technology and that's certainly what we're teed up to do.

Fintech challenge?

Lloyds Bank was founded way back in 1765 in Birmingham and grown through organic and inorganic expansion to become the Group it is today. Recent years have seen the rise of so-called challenger banks as well as moves by fintech firms to expand their footprint into what has been the remit of traditional banking operations. Nunn is phlegmatic about the threat that such digital pretenders pose to his organizaton:

Fintechs have been around now for a significant period of time. When I look at Lloyds Banking Group, we have, by far, the biggest digitally-engaged customer base. When I look at the scale of what we do, some of the fintechs, at least two within the UK claim to have about half the customer base that we have. We have 28 million customers. But they have somewhere between [ 1/30th and 1/50th ] of our deposits and [ 1/50th and 1/200th ] of our lending. So there's a long way for them to go to build the trust and confidence in their customers.

And actually, in the businesses we care about where we think there's sustainable returns...like personal current accounts, We’ve grown our market share in the last 4 years from 21.5% to 24.5%. So yes, it's a very competitive market. you have to be brilliant at digital services, but then you have to compete in a way that builds trust and actually creates value. And that's what we've been doing, and that's what we're going to continue to do going forward.

It’s a whole different playing field, he contends:

We're just playing different games, right? We serve the whole of society with a very broad range of products. We're able to do things that most of those fintechs haven't got any capabilities to do, and no ambition to do. They do some other things that we don't do brilliantly compared to them, but in terms of what we're trying to do, which is be a meaningful trusted financial services provider that can join up for customers across a broad set of needs, that then delivers a very strong platform for growth and for our investors, we're playing a very different game.

So we need to stay very relevant and aware of what they're doing. I look at what they're doing...but the data shows that we're competing well. And I'm really excited about the combination of generative AI, agentic AI and digital assets. and how we can bring those to our customers and drive additional differentiation and growth going forward.

My take

It’s unfortunate timing then that Nunn’s upbeat commentary should come as the Group faces flak for a reported flaw in its app that appears to have allowed customers to see other people’s transactions, including such as direct debits, wages, cash withdrawals, and some national insurance numbers related to payments! UK legislators are taking this so seriously that the powerful Treasury Committee of the House of Commons has this week written to the bank demanding an explanation.

That incident notwithstanding, Lloyds Banking Group does stand as an enduring testament to the benefits of an ongoing commitment to digital transformation. Lots of organizations talk about their digital journeys; Lloyds appears to realize it’s a journey without end, in a positive way!