Lloyds Banking Group is exploring the use of a cloud-based core banking platform from UK fintech Thought Machine through its IT services relationship with IBM.
The fintech was set up by ex-Google executives, including Paul Taylor, the company’s former head of text to speech, in 2016.
Thought Machine has built a cloud-based banking infrastructure, known as Vault. When it was announced in 2016, it was said to offer a real-time, high-volume architecture that can handle billions of transactions a day, with cryptographic security via private centralised ledger and smart contracts to enable banks to launch new products quickly.
Smart contracts slash the time it takes to launch new products, allowing customers and banks to agree terms and sign off highly personalised agreements in minutes.
IBM, already a major supplier to Lloyds Banking Group, is now a global implementation partner for Thought Machine. Last year, it secured an outsourcing agreement with Lloyds worth £1.3bn over seven years. This is part of a major transformation of the banking group.
Zak Mian, group director of transformation at Lloyds Banking Group, said: “A key part of our recently launched three-year strategic plan is applying technology innovation to meet our customers’ evolving needs. I am really excited to work with IBM and 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.”
- Cloud-based platform offers functionality around smart contracts and a workflow engine for bank processes.
- The next generation of IT professionals in the banking sector will face the same legacy headache as their predecessors.
- Lloyds Banking Group is revamping the roles of thousands of staff as it becomes digital.
Thought Machine’s technology is considered to be a possible means of overcoming the reliance on legacy core banking infrastructure at large banks.
“Banks have built interface layers with more modern technology, but there is only so far you can go before the foundations themselves have to be replaced,” said Thought Machine CEO Paul Taylor. “This specially designed cloud-native platform has been written to bring a modern alternative to current platforms that many banks around the world are struggling to maintain.”
Lloyds is not the only bank exploring Thought Machine’s technology. App-based challenger bank Atom, which gained a banking licence in 2015, said recently that it is putting its future products and services on Thought Machine’s Vault.