Lloyds Banking : Presentation transcript (2025nov6 lbg digital ai presentation transcript)

LLOYDS BANKING GROUP PLC- DIGITAL AND AI INVESTOR SEMINAR TRANSCRIPT

(amended in places to improve readability only)

Thursday 6 November 2025 - 1pm LBG:

Charlie Nunn, Group Chief Executive

Ron van Kemenade, Group Chief Operating Officer

Douglas Radcliffe, Group Investor Relations Director (Moderator)

Charlie Nunn:

Good afternoon, everyone, and thank you for joining us today. Having previously covered our growth priorities across our business units, I'm delighted to welcome you to the final investor seminar in this strategic phase focusing on digital and AI, a very topical subject. These capabilities cover the full breadth of the organisation and act as a critical underpin to our strategy. It's an area that myself, the Board, and the rest of the management team have been extremely focused on over the last four years. And I was proud to see yesterday that our excellent progress has been recognised in Euromoney's latest assessment of digital banks where we ranked within the top 20 globally out of a sample of more than 300 banks. I'm excited to be able to share with you some of the actions we've taken since 2021, as well as giving you an insight as to how we're thinking about future opportunities. I'm joined today by Ron van Kemenade, our Chief Operating Officer. As in previous sessions, I'll provide a brief overview before handing over. As always following the presentations, we'll have plenty of time for Q&A. Let me start on slide four.

Slide 4 - Innovating at scale to unlock value

We're going to cover a number of topics as part of today's presentation, but the key messages that I'd like you to take away are as follows.

Firstly, we're a digital and AI leader today and have distinct competitive advantages that will provide the foundations for long-term leadership.

Secondly, since 2021, we've taken decisive action to enhance our infrastructure and underlying capabilities to enable change. The ongoing progress here creates a platform for innovating at scale both today and in the future.

Thirdly, as a result of this change, we're now delivering leading propositions and extending our digital capabilities right across the Group for the benefit of both customers and colleagues.

Fourthly, we're extending our leadership position into new and emerging technologies and we feel well-placed to succeed in a period of potentially transformational change for the industry. Taken together, these actions are delivering significant value for the Group today, both in terms of driving revenue growth and improving efficiency. We see scope for this to accelerate meaningfully in future periods.

On slide five, I'll provide an overview of our strong foundations.

Slide 5 - Building on distinct competitive advantages

With 23 million digitally active users and over 21 million of these also using our mobile app, we are the largest Fintech in the UK, but we're also much more than that. Our scale drives unrivalled engagement with nearly 7 billion annual logons. It's also helped create a unique data asset with the Group processing one in four card transactions every year, equating to nearly £330 billion pounds of annual spend. Given we have relationships with over 50% of the UK adult population and more than 1 million businesses, nobody is better placed within financial services to understand their needs. As you'll hear shortly, we're unlocking more value from our data today and believe this will be one of growing importance into the future. On top of this, we have long since recognised that we must invest to be at the forefront of change, building strong AI foundations that will equip us with the necessary capabilities to continue to innovate at pace and deliver for our customers. Whilst others may be able to demonstrate strengths across some of these areas, it is the combination of scale, engagement, data, and capability that we believe provides us with a distinctive competitive advantage, reinforced by our strategic priorities.

Turning now then to our strategy on slide six.

Slide 6 - Significant progress to date, executing on a clear journey

When we presented our strategy in February 2022, we acknowledged that despite strong foundations, there was a significant opportunity to unlock the Group's full potential. From a digital perspective, we had scale, but like all large financial services firms, we had a complex technology estate in need of modernization, which limited opportunities to truly innovate and deliver at pace for the benefit of our customers. Our strategic priorities have been focused on addressing these challenges and we've made great progress. We've further extended our scale leadership position, but have shifted the digital channel from one of purely servicing to one of engagement too.

This has been supported by modernising our technology estate in the areas that are most important to effectively compete. This means we can significantly increase the pace of innovation and extract more value from the unique data asset, unlocking new growth opportunities for the Group. As our legacy becomes less of a headwind, we've also been able to shift our investment toward building future capability. New and emerging technologies such as agentic AI and digital assets have the potential to significantly shape the future of our industry, reimagining customer outcomes. We're taking proactive action to be at the forefront of this change, cementing our status as the UK's digital and AI leader.

On slide seven, I'll highlight how digital and AI leadership delivers clear financial benefits.

Slide 7 - Driving significant value now and for the future

The actions that we've taken during this strategic cycle are creating significant value for shareholders today. Innovative propositions and enhanced experiences are deepening customer relationships and driving revenue growth through both existing and new streams. In addition to supporting our ongoing franchise growth, the benefits of our investment in specific digital and AI initiatives will contribute more than 70% to our strategic revenues target in 2026.

At the same time, we're driving efficiency gains across the Group, lowering cost to serve and delivering a more agile organisation with a more flexible cost base. More than 60% of the circa £1.5 billion pounds of cost savings realised to date are directly attributable to our digital and AI initiatives. This is great progress and a sizeable contribution, but encouragingly we see additional upside beyond the current plan. Our commitment to investing in new and emerging technologies has the potential to unlock further value, improving operating leverage through new revenue growth opportunities, drastically reduced acquisition and servicing costs, and a step change in productivity. We'll discuss some of these areas today and you will of course hear more about these benefits when we update you on our strategy in 2026.

Before handing over, I'll briefly introduce you to Ron on slide eight.

Slide 8 - Introduction to Ron van Kemenade

To deliver such a significant transformation, it was critical to put in place the right leadership. I was therefore delighted that Ron agreed to join the Group in 2023, bringing a proven track record of leading major technology transformations. Ron has a clear understanding of what makes companies best in class and is able to keep us honest throughout the journey, as you'll hear, as well as providing the necessary expertise and the leadership to drive the change. Ron has a broad remit at the Group bringing together multiple areas to deliver a technology centre of excellence. His teams are a key enabler to our strategic growth priorities with connectivity to our customer facing business units established through integrated CIOs to help foster innovation. I'll return briefly at the end to explain why I'm so excited about the opportunity that new and emerging technologies present for the Group. But for now, let me hand over to Ron to talk you through the journey we're on.

Ron van Kemenade: Slide 10 - Overview

Thank you, Charlie. Well, after such an introduction, I can probably only disappoint you.

Let me talk you through indeed our digital and AI strategy. And if you can't pay attention for all 12 slides, just remember three things. When I joined, like Charlie said, mid 2023, neither Charlie nor Robin Budenberg made it a secret that there was a lot of work to do, addressing ways of working, people, technology, the legacy estate. But at the same time, they did convince me with the opportunity because it's an honour to be the

technology, data, the Group COO leader of a bank that is the largest financial institution in the UK, having impact, like Charlie said, on half of the households with 30% of every payment processed in this country. There is a huge opportunity to become the biggest Fintech of the UK. That convinced me, and now two and a half years into the journey, I can confidently say that we are effectively addressing our past, that we are delivering on our strategic objectives of the Grow, Focus, and Change strategy to '26, and then we are laying a solid foundation for innovation and base in the future.

And let me elaborate on those things in the succeeding slides.

Slide 11 - Modernising infrastructure to create a platform for innovation…

Let's start at the beginning. There was obviously a legacy landscape. All banks have legacy, we as well. It's a matter of how you address it. And dealing with modernization of your infrastructure is critical to lay a foundation for pace, for cost-effectiveness, and for innovation for the future. And we are making good progress. On the lowest layer of the stack, we are consolidating our data centre footprint from eighteen in '21 now down to nine, and by the end of '27, we'll reside most of our tech landscape into hyper-modern, scalable data centres next to our public cloud usage.

Secondly, if you look at our application landscape, we are simplifying hugely, having taken out 20% of all the applications by pure decommissioning. And at the same time, of the remaining landscape, we have modernised half of it, bringing us to a point where legacy is not in the way of pace nor innovation anymore. You could say, 'well, Ron, there is still 40% left', and you're right, but we consciously chose three major platforms that we believe are crucial to deliver more value at pace for our customers and colleagues. First one being our digital platform, enabling our digital channels. Secondly, our data platform so we can unlock the value, as Charlie said, of our rich wealth of data. And thirdly, our co-banking platform which unlocks new products for our customers.

Slide 12 - …whilst investing in our people to create enduring benefits

Second part of our transformation is of course about people. And arguably this is the most important part, one I'm extremely passionate about. We have decided we want to build a workforce of highly engaged, highly motivated, purpose-driven, and above all highly skilled engineers in data, in cybersecurity, in AI, and in tech. And in doing so, we are recognised in the market. We are able to attract top talent from recognised tech companies, from Amazon, from Google, and you've seen the announcements of recent appointments of our Head of AI, our CIO for the Commercial bank as good examples.

Secondly, we have hired over 900 graduates, people coming in fresh from university with a new mindset who are, I would say, born with technology, to whom a mobile app or AI is just something that they have grown up with. And we have hired over 8,000 engineers over the past four years, effectively changing the ratio from 30% permanent workers to 60%, on our way to make it 80% by the end of next year. Again, a workforce that is committed by signing up as an employee for Lloyds, people who know our purpose, who live the experience of our services every day, either working in the UK or in India.

Slide 13 - Resetting change through our Platform operating model

Third part of our transformation is the way we work. And we have effectively moved all of our change and run activities into a platform model. And you've heard words like platform, maybe you've heard of words like tribes in my previous employer. It's one and the same. We combine people from technology and business into one organisation that fully own run and change, that are joined up by one backlog that is fully product driven to deliver value, that share the same objectives, where the business is leading on what we are supposed to do to deliver on our strategy, and the tech people worry about how to deliver this. And a very good example what benefits this delivers, this platform model, is the recent introduction of a new personal current account for our mass affluent customers called the Premier account.

And arguably, a personal current account is one of the most complex products to introduce in a bank. It is connected to literally everything, to the lending domain for overdrafts to payments obviously to the customer wellbeing or arrears management platform, your channels - both colleague channels as well as digital. It ships data to marketing, risk and finance. So it's probably the most connected product. And we delivered a fully new proposition just within five months where if we look back to previous introductions, this would've taken us arguably in between 12 and 18 months. And I think 12 is on the more optimistic side of the spectrum.

And next to the pace, the platform model does help us reduce the cost to deliver. In gross savings, we have saved over £300 million annually so far, which if reinvested, adds only to additional capacity to further accelerate our change.

Slide 14 - Providing leading experience within the mobile app…

Now, this is the effort, this is what we have done. The question is what does that actually deliver for our customers? And let's look at our mobile app. And Charlie already alluded to this, highly recognised by Euromoney in the benchmark.

I think we're up in the right quadrant at somewhere number five, six, or seven - close to ING by the way. That's no coincidence. Yeah, it's slightly ahead, Charlie, that's what you get. So it is arguably our most important channel, that's why it's so relevant to look at the impact there. In terms of engagement, we are now driving over 30 million fully personalised engagements a day, just imagine that, by sending out 20 million notifications that customers react to.

In terms of sales, the channel share for sales has gone up 20 percentage points from 55% in '21, to now over 75% of all of our product sales go through the mobile app, which is a huge impact. And in terms of our impact for customers, we are now embedding AI, which makes their interaction with the mobile app even more engaging. It feels more natural because you can simply talk and it feels you talk to a person that gives you relevant answers, which is arguably a more intuitive and natural way of interaction than just clicking on buttons, going through forms and dialogues.

Now, let me give you one example that I'm really proud of.

Slide 15 - …supported by frictionless customer journeys

In only eight weeks, or we express this in sprints of two weeks, but let's say for normal people eight weeks, we fully redefined our onboarding for new customers. So from downloading the app, to having a personal account that is actually reachable, you can fund it and you can withdraw money, you have your card in your wallet, your virtual card in literally seven minutes. Just imagine, if you would start this onboarding right now, which I'm sure you will all do, you're eager to open an account with Lloyds I'm sure, you would be done before I'm actually done with my presentation, and this is on par level with our competitors in the market, in particular the neobanks. And the impact of this, again, for the bank, the value is huge. Where only two years ago, 20% of all the personal current accounts openings were done through the mobile app, that has increased to 90% today and still counting.

So where we talked about the impact on just one channel, the mobile app, the question obviously is do all these investments actually scale? Is there leverage to it? And the answer is 'yes'. And let me talk you through this in three ways.

Slide 16 - Extending capabilities across the Group

The first one is that digital platform that I was alluding to, which is the basis of the successful mobile app. We are reusing this across the Group for BCB, for IP&I in the Scottish Widows app, which is built on the same digital platform, now scaling from 0.7 million customers this year to 1.5 million, which is our ambition next year. Again, using the same platform.

Second example is our business current account. I just told you about the beautiful story of onboarding in literally minutes. In the business banking account, this has reduced the time to onboard from an amazing 30days to now two days. And two days is still not where we want to be, but it's just an example of reusing the same investments that we did for consumers is paying off in the business banking domain as well.

Another example is in the domain of AI where relationship managers for real estate finance that need to capture these very complex tenancy schemes that they need to kind of take from all kinds of documents, which normally takes them hours to do, its tedious work and administrative work obviously, distracting them from interacting with customers. By implementing our generic AI capabilities has brought that down to less than five minutes. Just imagine what that unlocks in terms of value for our relationship managers in interacting with our customers.

Slide 17 - Increasing reach through ecosystems to drive high-value growth

Second way in which we are growing our business based on all the investments is how we have introduced ecosystems, something I'm really proud of, because there is this question of how do you engage customers that initially apply for a product, you approve them, and then what? And in particular for mortgage customers, this is an issue because customers do not have particular reasons to frequently interact with the bank unless they want to repay or they want to remortgage or whatever. But in between, there is hardly any engagement. And I think we really cracked this equation by introducing our Home Hub where we now have over 450,000 newly engaged interactions where customers are benefiting from insights about homes and living where we have offered additional services serving broader customer needs, and in doing so, we have retained

£10 billion of mortgages in just over one and a half years. And £10 billion, as you will all appreciate, is more than many mortgage providers actually have on their books and only this in one and a half years. And having built this ecosystem capability, we are now leveraging this across to transport, one of our most important businesses on the lending side, where we are now offering additional car insurance products and more mobility services contracting with other partners in our ecosystem. So, a good second example how initial investments pay out across the Group.

Slide 18 - Leveraging unique data asset through innovative propositions

And then to our data. As Charlie already said, we are, you could say figuratively, sitting on a wealth of data. We know more about British households and companies than any other company in the UK. It's a matter of how we unlock that value and grow our revenues by doing so. And we have enabled this by investing in our new fully cloud-based data platform, unlocking AI capabilities and analytics capabilities.

Two examples here. Personalised offerings, and a good example again here is from our mobile app for consumers where your credit score has been introduced, where customers can see what their actual credit score is as it is registered, what the components of that are, and we offer advice how you could improve your credit rating. It's fully personalised. Again, 12 million customers, to Charlie's point of scale, 12 million customers have registered for it and are using it and have now accounts, and this is only the start for 10% of all lending leads.

Second example of how we are using our data to drive revenues - we are all offering data products directly to our BCB and CIB customers in the commercial market, offering products under the name of market intelligence, where we are able to tell customers, based on obviously anonymized data, what their market developments and market share developments are actually compared to competition, which drives a huge value for those customers, driving deeper engagement with those customers, and helping us to ancillary business.

Slide 19 - Progress to date positions us well for the future

Now, all of this is kind of addressing my first points. What have we done to address the past and do we deliver on our promises today? And as you can see, we believe that we are effectively doing this. Legacy is not in our way anymore, we are leveraging value out of our initial investments across the Group, and we have laid a foundation for innovation for the future. And let me address this as the last part of my story.

Slide 20 - Actively scaling Gen AI, delivering value

What about the future? There are two major technologies that we believe will define the next couple of years. One is generative or agentic AI, no surprise to you, and the second one is digital assets, and I'll talk about them both.

We have invested into a generative AI platform, making use of the best available capabilities in the market, open to different LLMs in the back, using our data in a safe way with guardrails around it to make sure that we have ethical, unbiased propositions for our customers.

And we have moved beyond, and this is an important message, the phase of beautiful experiments, promising proof of concepts, and small pilots. Every investment we make needs to go to production. So we have committed to deliver 50 use cases into production this year alone, and we're on our way to meet that target, bringing £50 million of concrete money in the bank benefits this year only, and that's just the start of it. This will scale substantially, and I'm sure, Charlie, we will come back to this next year in our strategy update. This will scale substantially into the future. But that £50 million, and I can't emphasise that enough, is real money in the bank. It's no future promise. It's validated by our people in finance.

So we do invest in five areas, like I said. Directly in our customer interaction in our digital channels. Secondly, supporting our customer operations people, our relationship managers. And I gave you the example of real estate. We offer generic HR support through a modern proposition called Prosper to all of our 60,000 colleagues. And we are investing in improving productivity for our engineers, making use of GitHub and other tools. So those five areas - and I'm glad to say we are again seen by the market as leaders in this domain. One is Microsoft, who has called us out as one of the leading financial institutions in adopting AI, and if you don't believe, them, look at the survey of Evident AI, which ranks financial institutions globally, where we were in number 27 last year, now we're ranked number 15 and moving up, which puts us right at the top of UK banks which is obviously relevant to compare ourselves to.

Slide 21 - Building capability to be at the forefront of Agentic AI

Now, these are cases that I'm sure you're more or less familiar with, but this is not where it stops. We are using generative AI, and in particular Agentic AI to reimagine our propositions, and there is no limit to ambition here. As you all know, one of the big unsolved equations in financial services is, how do you scale financial advice, whether that's for pensions, investments or any advice-intensive products without adding people? How do you scale this in a digital way? And we are doing this, it's a proposition that in the consumer market actually has been introduced yesterday as a pilot for friends and family. It's called CoachAI, which is more like a broader advisor. In the next couple of months we will introduce a similar proposition specifically for investment advice called InvestAI, and we are proud that we have been elected one of the just five companies to be allowed in the experimentation and innovation environment of the FCA. So, they can work with us that we are working on a proposition that actually meets the regulatory requirements, as well as meeting customer expectations.

And let me show a short demo of this to-be-launched proposition.

So, big ambition here for how we want to use GenAI and Agentic AI to reimagine our propositions for our customers.

Slide 22 - Positioning the Group as the UK leader for digital assets

Let me finally move on to the second area of innovation, technology-driven innovation that I announced. And that is digital assets or programmable money.

Two examples here. Again, we believe we are well-positioned as a, not just a thought leader, but a very early mover, and in doing so we are positioning ourselves as a leader in digital assets as well. We have started a new lab and platform for this and we are co-chairing actually the UK finance platform for digital assets and GBTD, which is Great Britain Tokenised Deposits. And for those who think, "what are tokenised deposits?" That's a fair question, right? Let's say a tokenised deposit is nothing more than a deposit as you know it, so sterling money, but then deployed as code as smart contracts on a blockchain.

And why is that so relevant? Why do we need to digitise money? Because it gives us the opportunity to put logic to the transaction. For example, in peer-to-peer payments you can add conditions to it. How do we transfer the money? Only when the service has been delivered, right? Which a good example, and I'm sure Charlie will say a bit more about it, but in the conveyance of mortgages where you need a whole system of solicitors, notary services to actually make sure that there is trust in the system. When one customer hands over the money, the other customer hands over the deed to the property. Digitization of money gives you the opportunity to do exactly that without all of the intermediary steps. Because you can programme that condition into the money that it will only be released at exactly the same moment the digital deed is being transferred. I think that's a great example of how digital money, in particular tokenized deposits can actually help unlock a lot of value for the larger UK economy.

Second example is we did a UK-first transaction with Aberdeen Asset Management where we did a FX forward for two months. And then as you are undoubtedly familiar with, in an FX forward, you always have the margin calls, if the actual price is deviating from the set price. And to settle those margin calls is a hassle. You need to provide collateral - if the margin call is in your favour, you need somebody to repay you, and the other way around. There is transaction cost involved; you need to sell the collateral, you need to cash it, then transfer the cash.

And in tokenization in their case of a money market fund and on our side a digital bond, a digital gilt, we have been able to make margin calls real time. So, you don't need to sell cash out and pay, but you can simply

transfer part of the tokens of that digital asset, which lowers transaction costs for margin calls for the customers and it speeds up the process from one to two days to actually instantaneously. So, real benefits to customers and real benefits to us. That's why we believe digital assets are such a relevant second area of innovation in the market.

Third element is we are actively working with government with a consortium of banks to work on digital identity and digital verification services. Because again, we are sitting on a wealth of data and we are best positioned to verify people's age, for example, or people's address, or even people's affordability of certain things. So again, a third area where we believe there is again, we are only at the start of a new ecosystem of services where we are in front seat. And with that, Charlie, I hand back to you.

Charlie Nunn:

Thank you, Ron. Ron has just highlighted some of the exciting things we're doing today, but before closing, it's worth briefly stepping back to explain why we believe new and emerging technologies will present such a transformational opportunity, some of the examples Ron was just talking about.

Slide 24 - Increasing pace of change creates unique opportunity

Technological change has been a constant over the past three decades and has transformed the way in which the financial services sector operates. Looking ahead, as Agentic AI and digital assets become increasingly more mainstream, these present the next likely step change for the industry. Like with all change, this will present both opportunities and threats. However, given our existing leadership positions combined with broad-based support amongst government, Bank of England and other industry participants to position the UK as a leader for these new technologies, we see more opportunities than threats as we look out today. As an active participant in these discussions, we believe we're well-placed to shape a future that drives positive outcomes for our customers, whilst at the same time unlocking profitable growth opportunities for the Group and our shareholders.

I'll explain with an example on slide 25.

Slide 25 - Well positioned to address a transformational opportunity

Agentic AI and digital assets have the potential to be highly complementary with customers interacting with agents as a channel, and digital assets increasing the ease of transaction execution. For example, it's possible to imagine a scenario where home buying experiences could be enhanced by agents scanning for the best deals and undertaking the transaction on behalf of customers, with tokenized records and programmable money ensuring a seamless conveyancing process. For our customers, this has the potential to drive a meaningful improvement in the experience with reduced effort, greater security, and real-time settlement. It also presents opportunities for the Group, including lowering costs to both acquire and serve, and increasing direct engagement with customers in what is a highly intermediated market today.

It's clear to me what is required to be a leading provider in that future. Firstly, trust established over many years will be hugely important to both customers and regulators. Secondly, a broad offering will be necessary to maintain relevance and remain front of mind. Thirdly, those with the deepest pools of data will be best placed to train models on financial interactions. And finally, targeted investments in capabilities will be critical for leveraging AI at pace.

This Group, Lloyds Banking Group, is uniquely placed across all four of these areas within the UK. Our scale and breadth of businesses spanning retail and commercial banking, insurance and wealth is unrivalled. And our unique data asset will become of even greater importance than it is today, benefiting from the infrastructure investments that Ron's just described in this strategic phase. Combined, we have a truly differentiated position compared to all other providers.

We're going to talk more about these areas more in detail when we provide the next phase of our strategy in 2026, but I'm highly confident that the actions we're taking today will continue to position the Group as a leader going forward.

I'll now close on slide 26.

Slide 26 - Innovating at scale to unlock value

In summary, we're building upon unique competitive advantages to reinforce our position as a digital and AI leader. We've made significant progress since launching our strategy in 2022. This is driving significant value for our shareholders today, contributing more than 70% of our strategic initiatives revenues by 2026, and more than 60% of the gross cost savings realised to date. Our strong execution to this point means we are well positioned to take advantage of future opportunities, extending our leadership position across new and emerging technologies. This will further enhance operating leverage through new growth opportunities and continued improvements in efficiency.

Thank you for listening. I'll now hand over to Douglas who will facilitate the Q&A.

QUESTION AND ANSWER SESSION Douglas Radcliffe:

Thank you, Charlie, and thank you, Ron. We now have plenty of time allocated for today's Q&A session. We will start by taking questions from the room, but we'll also cover questions submitted online throughout the session. So, for those joining via the webcast, please follow the prompts to register a written question. When asking your question in the room, if you could please provide your name and institution before asking your question, that will be appreciated. Okay, so let's begin. I'll probably just start over that side. Guy, why don't we start with yourself?

Question 1: Guy Stebbings, BNP Paribas.

Thank you very much. It's Guy Stebbings at BNP Paribas. The first question is on ready-made investments, which I think is really exciting proposition. Could you tell us around the sort of expected timeline for the full launch of that? And then the working with the FCA in sandbox, how should we think about that in terms of safeguards around any future claims around quality of advice and that sort of thing?

The second question was on the Home Hub refinancing. Can I check that 15% definition? What that means is that 15% of total balances of refi through the Home Hub? Is there other refi's that happen outside of that? I'm just kind of keen to understand the definition and how that's evolved over time. Clearly that could be quite sort of powerful from a value perspective. We see more and more going through that channel.

Douglas Radcliffe:

Thank you, Guy. Probably makes sense for you to kick off with those questions I suspect, Charlie.

Charlie Nunn:

I think it probably does. Well, first of all, thanks. Thanks very much for the questions, and what's great about these as Ron teed up. You can see we're trying to make sure what we're doing around digital AI is leading into better propositions and enhancing the areas. Just in terms of ready-made investments, we already have a ready-made investment product live as you know, and it's been part of the success we've had to date. I think I've mentioned in previous sessions, we've gone from nine or less than 9% share of equity ISAs up to more than 20% and we continue to trade at that level of growth in our market share. And it was partly based on our ready-made investments journeys as well as some of our self-directed channels.

The exciting thing as you say, is the industry actually in the whole world, they've introduced robo-advice years ago, but it hasn't really had any intelligence in the advice journey. It's just been a structured logic journey to get through to a simple rebalancing ETF broadly. And the journey that Ron gave you an example of, a kind of conversational advice journey, which also uses the existing data the customer has to give them confidence to make the right choices, and that will sometimes, by the way, not be investing, it'd be better to pay off existing, for example, credit card loans. That's the journey we've got in this regulatory sandbox. We're intending to get it live in the Q1 next year. So, we'll be going through, as Ron described, we have a big user base internally with families and friends that we do co-development in the way that all the firms that you've spent time covering do who are not big banks, we've been doing that for a while now. So, we'll be working on that basis in the next period of time and then going live with customers.

And yes, the regulatory sandbox we think is really important in this context. Obviously, whatever we do, we want to make sure is endorsed by the regulator. There's been a significant change around the regulation that underpins investment advice, this concept called targeted advice or targeted support, which means we

already have a regulatory framework, which is much simpler than RDR, which is the regulation that underpins investment, and resulted in the majority of the market having access to investment advice. And so, we do have a regulatory framework that's clear around that, but as you rightly pointed out, Guy, actually getting the way the conversation and the journey works and having clarity with the regulator that they are comfortable and we are comfortable that gets to the right outcomes is really important.

So, one thing I think coming out of this is when you see this land, it'll be a fully functioning journey, but this is one of the things about Agentic AI, it'll be based on our data and our training of in many cases millions of interactions of customers that will improve the journey, and the journey will improve over time.

The other great thing about these journeys that we build and then the technology we now have, is we can collect a lot more data around how customers are actually going through the journey, where the fail points are and their understanding. And again, it's the engineering team working together with the experts in our investments and advice journey. We will then use that data to make these journeys safer. And I say this with a smile having run wealth businesses for a lot of my time. Instead of relying on one or 2% callbacks and sales quality, we can build agents, monitoring agents and do 100% quality checking, and that's the kind of mindset that we're going to be building into these journeys, so you should see it improve materially over time.

The final thing to say is that, look, it should improve what we're capable of doing today, which is already delivering value for the Group. But as we know, if we really start to, this is not really a phrase, but anyway, democratise wealth. We get wealth and investments to be something that the mass market really can safely get access to. It's going to take some time for them to engage to decide to put money every month aside for investments and for those balances to build. So, we think it's strategically really important in terms of relationship trust and over time it'll build a very attractive bluntly return business, but it's not going to happen overnight.

And then your second question around Home Hub, look, I'm going to give you what I think the answer is, but I think, Douglas, we should just make sure offline, I think that's relative to the whole of the refinancing market. As you know, we are by some way the largest mortgage provider in the UK. What's interesting of course is, as you know, only 40% of homes have a mortgage, and the average LTV is about 50%.

So, when you look at the numbers of customers, actually there are not that many people who are refinancing a mortgage. And we are by far the biggest. So, getting to 15% is material. Ron mentioned the over 400,000 customers engaged, that may feel low relative to the 28 million, but relative to the stock of mortgage customers it's a very, very high level of engagement. And that's why we are very excited about this homes hub tool. It really is material in terms of customers engaging with it, and then us having an opportunity to build a broader relationship. The one other point about the homes hub and you will get it immediately is we happen to operate in this market with 85% of mortgages distributed through brokers. And so, we find our customers are broker originated, may not have a relationship with the rest of the bank. Engaging with this Home Hub, looking at protection, thinking about our retrofit solutions, understanding the broader offers of the Group. So, it's actually one of these brilliant tools for helping ensure we give good outcomes to our very important mortgage customers, but engaging them on the Group more broadly.

Because the UK has got to this place where intermediation has become material. And as you start to think about the future and us connecting with customers and providing Agentic AI advice, we're pretty excited about where we could go.

Douglas Radcliffe:

Thank you. Let's take James next.

Questions 2: James Invine, Rothschild & Co Redburn

It's James Invine here from Rothschild & Co Redburn. I've got two, please. The first is that I think in the presentation everything was about Lloyds Banking Group products. I was just wondering if there's any scope to combine this with the open banking agenda and help customers to manage their finances across a lot of different providers. And if you don't do it, do you think somebody else will?

And then the second question is, it certainly seems like this is a great platform. Do you think it would work internationally? Have you considered opening a digital-only bank somewhere else? I know you wouldn't have all the customer data, but you would have the infrastructure. Thank you.

Douglas Radcliffe:

Thank you, James. Ron, I suspect probably the open banking side would probably be worth you addressing to start with and I suspect the international element will be Charlie.

Ron van Kemenade:

So, brilliant question actually, because as Charlie alluded to this, GenAI is based on LLMs, right, which provides generic insights, it creates generic knowledge. And then you have your own view on the customer based on their product possession today, based on their channel behaviour, based on what you know about their credit worthiness, all of this. Open banking definitely broadens that picture again where you add to the relevant context knowing more about the customer than you do today. Now, as you're aware, we are offering open banking APIs to the market as well, as we offer our customers the opportunity to open their accounts and other products into our digital channels. And we are actively integrating this into CoachAI and further AI based propositions.

Charlie Nunn:

Great, so it is a really interesting, and I don't want to take the question further, James, but my guess is you're thinking as we build intelligence that's really supporting customers, how do they start navigating the market? And so we are actually, I don't know whether we are, my guess is we are, I should know this data point. My guess is we are the biggest provider of integrated products across providers through our digital app, because we've got by far the biggest digital app. And many of our customers, I can see my head of this over here, I'm not going to ask her the answer to this. Many of our customers already show their other products and other banks in our app, and we see that data today. The really interesting question is what happens next as the intelligence in our app and then through other LLMs in the market start to provide advice to customers about who they're going to shop, how do you provide the best advice and how do you compete?

And that's where, again, being at the forefront of this with the best data to get the best outcomes to build the trust we think is the most important thing. And I'm not being vague and avoiding it, but I think there's an opportunity and a threat in that we feel well-placed and positioned to look after. Look, just on the international side, one of the things that I say a lot to our team is, we are staying focused on delivering the current strategy for now. And through 2026 we've got some pretty bold commitments that I know many of you and all of you are aware of and you've got real clarity that we as a team are committed to delivering. And at the starting point, when you look at the value of the Group and the value coming out of our UK businesses specifically, delivering this agenda both in '25, '26 and then for the potential beyond is huge.

The kind of cash flows, the outcomes, and then as you know, our commitments to greater than 15% Return on Tangible Equity, 200 basis points of capital and a cost income ratio of less than 50% by next year is forefront of our mind. So, that's where we're focused for now. Definitely, there are options for us to do things internationally. We will be, and we have been having a discussion around that as a team. And we'll come back on the next phase of the strategy. And I think you teed it up well. We know we have one of the best digital platforms, and Ron and the team have just gone through an exercise of modernising the infrastructure behind it. There's a bit of a way to go on that. So that could be a choice for us, but we always need to come back to what's our core strategy and what's the best return for our shareholders and we're going to look at that option in that context.

So, no commitments at this stage, but I think when you become, we're going to end up being one of the biggest and certainly most successful digital retail and then SME, we're slightly smaller, but digital retail banks in the world. We will have very distinctive capabilities that we could take elsewhere. But no commitments around that, because I want to stay focused on the current strategy.

Douglas Radcliffe:

Thank you. Let's go to Alvaro next.