Lloyds Banking Group expects £100 million AI boost as CEO warns bankers must reskill

Lloyds Expects £100 Million Boost from AI Spend in 2026

Lloyds Banking Group Plc expects to see a £100 million ($138 million) benefit from using artificial intelligence this year as the bank continues investing heavily in technology. Britain's biggest mortgage lender said it has already scaled 50 generative AI use cases into full production, and tools like these helped boost profit by £50 million last year through both revenue gains and cost savings. AI has given banks more options in their efforts to overhaul decades-old systems at a time when digital-native challengers such as Revolut are luring a growing share of customers. Lloyds is one of the first to give a concrete number on AI's profit-and-loss impact. "We've been a leader on AI for a long time, we already have 800 AI live models that have delivered a lot of strategic revenue growth and efficiency savings," Nunn said in a Bloomberg TV interview after the firm's full-year earnings. Lloyds was trading on Thursday at a value of about £61.7 billion ($85.2 billion) -- making it slightly bigger than Revolut, whose fundraising last year valued that firm at $75 billion. Get the Tech Newsletter bundle. Get the Tech Newsletter bundle. Get the Tech Newsletter bundle. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg may send me offers and promotions. Plus Signed UpPlus Sign UpPlus Sign Up By submitting my information, I agree to the Privacy Policy and Terms of Service. Lloyds is using the technology to automate complaints handling, HR tasks and coding, according to an earnings presentation on Thursday. In some cases, it's reduced the time taken to classify a customer case to 1 second, down from 5 minutes. The firm is also prioritizing agentic AI, which automates and executes processes, for tasks such as fraud prevention. A financial assistant for customers is also in the works. While the longer term outlook for jobs in the wake of AI is unknown, Nunn told reporters Lloyds has recently hired 9,000 people largely in data and tech roles. More than 50% of the firm's applications are now hosted on cloud technology, which has meant its use of data centers had halved since the start of 2022, according to the presentation.

Lloyds boss warns bankers must 'reskill themselves' amid impact of AI

Charlie Nunn said banks would be hiring staff with different skill sets as customer experience will 'radically change' The boss of Lloyds Banking Group has warned that bankers will need to "re-skill themselves" to survive the oncoming AI boom that stands to transform the financial services sector. Charlie Nunn told reporters on Thursday that while he could not predict the full impact that AI would have over the next decade, it was clear that banks would be hiring staff with very different skill sets going forward. "This is going to radically change how customers experience financial services," he said, meaning banks like Lloyds would "have to support colleagues to re-skill themselves". He acknowledged that the bank would have to "reduce some jobs in some areas", but played down forecasts by Morgan Stanley, which last month said more than 200,000 European bank jobs could be axed by 2030 due to AI adoption and branch closures. "The reality is we don't quite know how to play out in the medium term, and I think that's where you see the larger numbers being forecast," Nunn said. "It's not that we're trying to hide anything. But at this stage that's not what we're seeing specifically around generative AI - although I do think it will be transformational." It came as Lloyds provided a rare insight into the financial impact of its AI use, saying generative AI - which creates new content based on patterns in vast, existing datasets - provided a £50m boost to its balance sheet last year. That involved using AI to process complaints, which were now categorised in one second rather than five minutes, and halve the amount of time spent on coding. "AI is a once-in-a-generation opportunity, and one the group is grasping for our customers," Nunn said. The bank expects the financial benefit to double in 2026 to more than £100m, as Lloyds embraces agentic AI: a more autonomous model that can proactively plan and execute tasks with minimal human oversight. As for potential job losses, Nunn said: "We always take that very, very seriously and support those colleagues. But I do see that there's lot of new roles and skills we need, and we are investing in those." It came as the investment minister, Jason Stockwood, said the UK could introduce a universal basic income to protect workers being disrupted by AI. While not part of official government policy, Stockwood told the Financial Times: "People are definitely talking about it." But Nunn suggested tech-related change was inevitable, recalling how his first job involved building electronic trading floors which ultimately helped automate wholesale banking throughout the 1990s. "We've seen radical efficiency improvements, and reallocation of talent and skills, through financial services for my whole 34 years I've been doing this job," he said. Lloyds on Thursday reported a 12% rise in pre-tax profits to £6.7bn for 2025, as a rise in lending and income from fee-generating parts of its operations including insurance helped offset the impact of falling interest rates last year. The better than expected rise in profits allowed Lloyds to pay shareholders another dividend worth 2.43p a share and launch a new £1.75bn share buyback programme. Lloyds' profit growth was due in part to a rise in mortgage lending. Nunn told BBC's Radio 4 programme that Lloyds - which owns the Halifax brand and is the largest mortgage lender in the UK - had seen "strong volumes" and "good demand" for home loans. "We've seen interest rates come down a bit and we are expecting two or more interest rate cuts this year," he said. "Obviously as an industry, and as Lloyds Bank, we've been innovating around how we provide affordability and access to mortgages, which has supported that growth."

Lloyds to go deeper into AI after totting up financial value of current deployments

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Announcing the numbers in its annual financial report, the bank says that in 2025 it deployed over 50 GenAI solutions, including faster and more intuitive in‑app search experiences, along with quicker, more accurate responses across customer operations. Having tested the waters, the bank says it is now committed to scale the technologys across the bank, maximising tools that are already in use and making "significant strategic investments" in agentic AI. Inhouse tools that are improving productivity include: an AI‑powered internal search and knowledge assistant that helps staff quickly find information to answer customer queries; a GitHub Copilot for Engineers, driving a 50% improvement in converting code for established systems; and an AI HR Assistant that resolves around 90% of HR queries correctly on first contact. Buouyed by the returns on its investment, the bank recently launched an AI Academy to provide AI training for all 67,000 employees, regardless of role or expertise. In addition to the new GenAI and agentic AI solutions planned for this year, a major milestone in 2026 will be the full customer rollout of the Group's AI-powered financial assistant, which will give customers quicker answers, tailored guidance and more intuitive support within the mobile app. Over time, it will expand beyond everyday banking to help customers navigate savings, borrowing, investments and protection. Ron van Kemenade, group chief operating officer at Lloyds, says: "AI is already delivering real value for our business, our colleagues and our customers. The progress we've made this year shows the scale of the opportunity ahead. By continuing to extend our leadership in AI and scaling the most impactful technologies across the Group, we can unlock new opportunities to better support our customers, strengthen our operations and realise further financial benefits in the years ahead."