Lloyds Bank digital transformation chief– ‘we are in danger of just becoming the plumbing’

Banks are in danger of “just becoming the plumbing” if they don’t work out their new role in the financial eco-system as the storm of payment innovations continues to rain down on the industry, according to Lloyds Bank head of digital transformation Terry Cordeiro.

Speaking at the Tug Life pop-up event in London today (17 June) as part of London Tech Week, Cordeiro said that as the number of startups in the financial sector begin to rise, so does the pressure placed on large banks which are in danger of losing their value.

“There is pressure on the banks… and not just from the startups but from challenger banks such as Atom Bank, Starling Bank and Metro Bank,” he warned. “They are all trying out different business models, they are all after a piece of the pie and they are all after changing the way that we do banking.

“There are so many different ways that you can make payments these days; you can pay by email, by Paypal and you can pay by your mobile phone, but all of that relies on the same plumbing and predominately it’s the banks that provide that plumbing. Right now it’s of value to us but I think we are in danger of just becoming the plumbing.”

To address this crisis, Lloyds Bank is working around four core focus points, including making better use of consumer data, trust and security, humanising banking and innovation.

Cordeiro said that banks should look to build on their existing digital relationship with consumers and at Lloyds the company is doing this by investigating ways it can help its 5 million mobile bankers balance their finances though mobile applications. For example, via an app Lloyd’s could interact with consumers as they're considering a product purchase and show them how it would impact on their account if they decide to do so.

“At the moment we do very little with that data,” admitted Cordeiro. “All we do is present it back to you as a statement. We need to use it in the right way such that we can help you make smarter decisions.”

Like most major banks, working with start-ups to improve their offering is another priority for Lloyds and the company is currently engaged in a scheme - called Co-opetition - where competitors partner together to create new business strategies in order to maximise their value in the market place.

“We definitely understand the threat that we are under, we need a new business model, [but] through things like Co-opetition and humanising banking, we can add value,” added Cordeiro.

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