Lloyds Banking: Innovations and Opportunities

Even before the current pandemic, more and more of everyday banking practices were shifting online. It is critical to give consumers the value they want and need to ensure they retain loyal customers in a very competitive environment. Lloyds Banking Group is currently the largest provider of savings, loans, credit cards, and mortgages in the United Kingdom (How Lloyds are Embracing the Digital Age, 2018). It was an early first mover into the realm of digital banking and this remains part of its current approach. However, as a legacy bank, it is hyper-concerned that new institutions and innovations are seeking out ways to gain a foothold in the industry. As a result, 2018 kicked of a three-year $2.7 billion-dollar transformational approach to create new ways for employees to communicate well with one another, to serve the customers digitally, and seek out new ways to reach digitally reluctant customers (Fawthrop, 2019)

Innovation and Opportunities

Lloyds is aware that embrace of online banking is not universal, and 9% of the UK population still prefers not to bank online (How Lloyds are Embracing the Digital Age, 2018). This is not simply the elderly and technophobes, but small businesses and charities which are reluctant to make the investment of time and training in going online: an estimated 38% of small businesses and 49% of charities lack basic digital banking skills, despite the fact that online options for payment are associated with more commerce and more donations (How Lloyds are Embracing the Digital Age, 2018). Lloyds is seeking to communicate this and reduce the intimidation factor to leverage this opportunity and increase its customer base, resulting in greater loyalty by late-movers to online banking. (How Lloyds are Embracing the Digital Age, 2018). Rather than cater to the digitally phobic, Lloyds wishes to bring even the most reluctant consumers into the world of online banking.

Offering a more service-focused focus in banking is equally critical. Although pandemic restrictions have resulted in difficulty for online branches, Lloyds has continued to leverage branch managers and face-to-face services when it can to help customers make the best choices for themselves regarding their banking needs (How Lloyds are Embracing the Digital Age, 2018). For customers with lower levels of digital comfort, online banking can lose some of its intimidation factor when explained by a person face-to-face.

Local branches can also help navigate issues such...

Branches can solicit feedback from customers about the online experience. In one survey, an estimated 61% of consumers said they would change banks if they were dissatisfied with the mobile platform and insufficient opportunities to use money management skills (Meola, 2021). The industry overall is using more artificial intelligence (AI) tools in routine banking, and as consumer confidence in AI grows, will likely to do so more in the future (Meola, 2021).

Innovation Management Process

Lloyds is so hyper-concerned about orienting digital technology, it has embraced it when educating employees as well as its customers, based upon the philosophy that customers cannot feel comfortable with digital communication when banking if employees are not. This has resulted in a training program that is digitally specific for employees who specifically want to build their careers in the online sector (How Lloyds are Embracing the Digital Age, 2018). Lloyds also engages in frequent in-house training overall, with Ted talks, so-called hackathons, and the use of competitions and outside media to drive innovation, discussion, and self-criticism within the organization (How Lloyds are Embracing the Digital Age, 2018).

One potential disruption to Lloyds careful training and focus on service, however, is the focus on AI in the banking sector as a replacement to such personalized investment advice service, which may be used to offer advice based upon algorithms…