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Lloyds invests in fintech Thought Machine

Lloyds has taken a stake in a fintech company that is developing a new core banking platform, as part of a “strategic partnership” designed to speed up its ambitious digitisation plans.

The bank invested £11m for a 10 per cent stake in east London-based Thought Machine. Lloyds said it had been working with the company since 2017, and expected to start rolling out technology developed with Thought Machine next year. Legacy lenders such as Lloyds often have back-end IT systems that were developed in a piecemeal fashion or through acquisitions over many years, making them complex and inefficient.

New challengers such as Monzo and Starling point to their simpler core systems as a key competitive advantage, but moving to new systems can be fraught with difficulty for established banks, as illustrated by the crisis that engulfed TSB when it tried to move to a new platform earlier this year.

Lloyds said Thought Machine’s technology could allow it to provide more tailored products and develop new services more quickly. Zak Mian, Lloyds director of transformation, 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.”

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Aneta Larkins


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