Lloyds Banking Group says 'digitization' will power more branch closures
- Reference: 1759390213
- News link: https://www.theregister.co.uk/2025/10/02/lloyds_banking_group_digitization_investor_call/
- Source link:
On a [1]call to investors , the UK household name said it had invested £3 billion over three years, and £4 billion over five years, in transformation, a large chunk of which has gone on technology and cyber security.
That's starting to have a positive impact from an efficiency perspective and on cost to serve and cost to acquire retail customers," claimed Sarah Robson, senior manager, investor relations, Lloyds Banking Group.
[2]
"Our strategic initiatives have generated £1.5 billion of gross cost savings so far as a result of the strategy, and we continue to see further opportunities to reduce manual back-office processes from a finance perspective," she said.
[3]
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"From a retail perspective, you continue to see kind of branch closures and using digitization to improve the cost to serve and also improve the customer journeys as well… also in terms of building things into the app," she said.
Robson said the bank — [5]which has revealed that hundreds of branch closures are due to take place in 2025 and 2026 — plans to experiment with AI-powered wealth management tools for its richer customers.
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"What we are also doing, linked to our mass affluent proposition, is work with the [UK regulator] Financial Conduct Authority in a sandbox environment to look at AI-driven money management tools and whether there's more that we can do in that space, particularly linked to investments as well as savings products. It's definitely an area that we're very much focused on," she said.
However, Robson admitted that some customers are not digitally active, and the bank continues to operate more than 1,000 branches in the UK, the largest number among high-street banks.
"But increasingly, customers are becoming more and more digitally active," she said.
[7]
Lloyds Banking Group revealed in January that it planned to close 136 branches by March 2026.
Consumer group Which? said banks and building societies in the UK have [8]closed 6,561 branches since January 2015 , "at a rate of around 53 each month." That equates to 66 percent fewer physical outlets.
"NatWest Group, which comprises NatWest, Royal Bank of Scotland and Ulster Bank, has closed 1,505 branches - the most of any banking group. Lloyds Banking Group, made up of Lloyds Bank, Halifax and Bank of Scotland, has shut down 1,423 sites."
[9]FOMO? Brit banking biz rolls out AI tools, talks up security
[10]NatWest banks on AWS and Accenture for AI-driven customer overhaul
[11]Payday from hell as several British banks report major outages
[12]Tim Hortons offers free coffee and donut to settle data privacy invasion claims
Earlier this month, Michelle Conway, lead data and AI scientist at Lloyds, promised a secure environment for customer data as it develops AI tools. "It's like Fort Knox locked down," she claimed.
Lloyds Banking Group – which looks after the cash of customers across Lloyds Bank, Bank of Scotland, and Halifax – [13]said the integration of AI into financial services was not just about adopting new technology but about "reimagining the entire banking experience."
In February, Lloyds [14]launched a review of the technology and engineering professionals working in the UK operation, with headcount reductions inevitable and some roles being offshored to Lloyds Technology Center in India. ®
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[1] https://seekingalpha.com/article/4826598-lloyds-banking-group-plc-lyg-strategic-progress-and-financial-outlook-to-2026-transcript
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aN5NQtXouu2muyyuX6wOmgAAAU4&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aN5NQtXouu2muyyuX6wOmgAAAU4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aN5NQtXouu2muyyuX6wOmgAAAU4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.which.co.uk/news/article/lloyds-bank-branch-closures-aim9B9r5MCSq
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aN5NQtXouu2muyyuX6wOmgAAAU4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aN5NQtXouu2muyyuX6wOmgAAAU4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.which.co.uk/money/banking/switching-your-bank/bank-branch-closures-is-your-local-bank-closing-ayYyu4i9RdHy
[9] https://www.theregister.com/2025/09/22/lloyds_data_ai_deployment/
[10] https://www.theregister.com/2025/07/23/natwest_aws_accenture_deal/
[11] https://www.theregister.com/2025/02/28/payday_from_hell_as_several/
[12] https://www.theregister.com/2022/07/30/in_brief_security/
[13] https://www.theregister.com/2025/09/22/lloyds_data_ai_deployment/
[14] https://www.theregister.com/2025/02/18/lloyds_tech_engineering_reorg/
[15] https://whitepapers.theregister.com/
Re: Prroof (if needed)
I strayed from their clutches years ago. I'd strayed into them when HSBC closed the branch in my preferred location. Lloyds then closed their branch there too. Had that one still been open I might not have been antagonised by the surly staff at two other branches.
The problem customers have now is lack of alternatives as they're all more or less at the bottom of their respective barrels although still striving to get lower. We need HMG to mandate a reasonable (i.e. considerably higher than at present) density of branches in order to for banks to retain their licences. No, "banking hubs" won't cut it, they need staff empowered to act on the bank's behalf.
Re: Prroof (if needed)
If people want branches to stay open, they need to use them regularly. You can't really expect any company to pay staff to sit around doing nothing (as seems to be the case in my local Lloyds) just so that they are there for you when you drop in once a year to pay in a cheque.
"Service that no one uses and won't pay for shuts down" would be a better headline for the story.
There are two problems the banks have. The main one is that people don't use the branches, but it's exacerbated by the UK's assumption that banking has to be free. My bank hasn't had a penny from me since I paid my mortgage off over 20 years ago. Sure, it makes money from the paltry sums in my savings accounts but that's not much and anyone who's got serioius money won't have it in a high-street bank. Most banks now are offering paid-for accounts with travel insurance or something attached but I bet the take-up is small and it will be too little, too late. Unless the government does as you suggest and makes having branches of some sort of bank** at regular spacings around the country a condition of their banking licence then pretty soon there won't be any bank branches left.
I know that you can do some banking at Post Offices there's an annual pay-in limit of £5000 across all accounts - which makes it useless for local businesses if the only bank in town closes.
**for the US readers - in the UK you can do your banking - pay ins, withdrawls, etc., at any bank, not just the one you bank with - and day-to-day banking is all free as long as you're in credit.
banks make money from the paltry sums in your current account as well. not to mention the time it takes for money to transfer between account. it mysteriously takes 3 days for cheques to clear, during which time the banks are making money - according to a lecture I went to from the BACS people the underlying systems can do the clearing overnight
..and you can't expect me to trust my finances to a bank where my only option is to call a number which is never answered or to speak to an unhelpful AI....
weasels
"... and also improve the customer journeys as well ..."
That would be a lengthy bus journey to the nearest branch instead of a 5 minute walk.
(parking in the city centre is a joke)
a large chunk of which has gone on technology and cyber security
Yet they still enforce an 8-15 character limit on passwords, while their usernames can be practically any length.
Prroof (if needed)
Their 'customers' really are cattle.