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The transformative power of AI in fintech

 

“With its ability to process vast datasets, identify patterns and make real-time decisions, AI is enabling fintechs to deliver smarter, faster, and more personalised services than ever before.” 

Ranil Boteju
and Kirsty Rutter
Published on: 04 July 2025
5 min read

In today’s rapidly evolving financial landscape, the integration of Artificial Intelligence (AI) within fintech is revolutionising how financial services operate. But this extraordinary change isn’t just about automation or efficiency – it’s about reimagining the very foundations of the industry itself.  

Indeed, with its ability to process vast datasets, identify patterns and make real-time decisions, AI is enabling fintechs to deliver smarter, faster and more personalised services than ever before. It’s also levelling the playing field, allowing nimble startups to compete with established institutions.  

What’s more, this shift is not just technological; it’s cultural. It’s changing how we think about trust, transparency and even the role of human judgment in financial decision-making. As AI continues to evolve, so too will the expectations of customers, regulators and partners.  

Here at Lloyds Banking Group we have a front-row seat in this transformation. Below, we share our reflections on why AI matters, how we’re engaging with fintechs and what this means for the future of banking and the financial services industry in general.  

Why AI fintechs matter  

Over the past 18 months, there’s been an explosion in the pace and potential of AI-driven innovation. Whether it’s fintechs or broader AI startups, we’re seeing a wave of companies doing things very differently from the large-scale cloud service and data infrastructure providers. For us, this is incredibly exciting.  

And we’re fortunate in the UK to be surrounded by a critical mass of world-class AI researchers – from Cambridge, Oxford, Imperial, UCL, Bristol and Edinburgh. This academic strength, combined with a vibrant ecosystem of experienced founders and a growing pool of funding, makes the UK a uniquely fertile ground for AI innovation.

“When it comes to successful AI fintechs, one of the biggest factors we’ve identified is speed.”

Partnering to accelerate our journey  

For us it’s not just about observing this innovation, it’s about engaging with it too. We believe large financial service providers like Lloyds Banking Group have a responsibility to partner with these startups to accelerate our own transformation; it’s part of our purpose of Helping Britain Prosper. These partnerships help us learn faster, think differently and move more quickly.  

We’ve found that working with AI fintechs gives us a two-for-one benefit: we get the agility and commercial sharpness of a lean startup, and we often also get access to academic expertise. It’s not uncommon for us to be in a meeting with a founder and a professor of AI, both bringing unique perspectives to the table. That’s a powerful combination.  

One example of this is our partnership with Aveni, a fintech that specialises in AI-driven financial planning tools. Alongside us, they launched  FinLLM, the UK’s first domain-specific generative AI model tailored for the financial services sector.  

By collaborating with Aveni, we’ve been able to ensure that the model’s capabilities are grounded in real-world applications and industry needs. This partnership has not only accelerated our technological capabilities but also enhanced our understanding of AI applications in finance.  

But we’re not just partnering with AI fintechs, we’re learning from them. Take Moneyhub, for example, whose AI helps us better label and understand customer transactions. Years of training have made their models sharp, fast and incredibly effective at turning raw data into personalised insights. Then there’s UnlikelyAI, whose focus on accurate, hallucination free AI solutions through their pioneering work on neuro-symbolic AI is helping us explore smarter, safer, more scalable tools that could reshape how we build AI across the Group. 

We’ve also tested TurinTech’s EvoML Platform to accelerate how we develop and deploy machine learning models, in a fraction of the time it would normally take a team of data scientists. Their platform supports the automation of the end-to-end data science lifecycle, leveraging genetic algorithms to output highly auditable ML pipelines – something that is incredibly important for many applications in banking. We’re now looking at how their AI agents can support our data teams as well.  

The value of speed and agility  

When it comes to successful AI fintechs, one of the biggest factors we’ve identified is speed. These startups operate with incredible agility. They pivot quickly, they’re lean, and they’re laser-focused on solving real problems. That mindset is contagious—and it’s something we’re keen to absorb.  

We’ve also noticed that many of these founders maintain deep relationships with their academic mentors too. It’s not unusual to find that a startup’s advisory board includes a professor who supervised the founder’s PhD. Why does that matter? Well, that kind of continuity and intellectual depth adds real value to the partnership.

“We need to invest in innovation not just for immediate returns, but for the learning and future potential it brings.”

How Lloyds Banking Group engages with fintechs  

When engaging with fintechs and establishing whether we can work with them, our first step is to meet the founders and learn more about their vision and the maturity of their solution. If we believe there is alignment between their solution and the firm's strategy then we will introduce them to the relevant part of the business.  

From there, it’s up to the business to decide whether to engage. If the conversation develops, we’ll explore whether there’s an investment opportunity. But investment isn’t the starting point; business engagement is. That’s how we’ve approached partnerships like the one with Aveni, and it’s a model that works.  

Investing for the future  

We’re also thinking about the long term. As we look ahead, we’re asking ourselves: what kinds of investments will help us deliver on our future strategy? Some of these opportunities won’t have a clear business case today.   

For example, they might be adjacent to our current operations or involve exploratory technologies. But they could be critical in three or four years’ time. That means we need to be willing to take risk. We need to invest in innovation not just for immediate returns, but for the learning and future potential it brings.

One area we’re particularly excited about is the potential for AI to enhance our cybersecurity measures. By investing in AI-driven cybersecurity startups, we’re exploring new ways to protect our customers’ data and ensure the integrity of our systems. These investments may not yield immediate returns, but they are crucial for building a secure and resilient future.  

What’s next?  

AI is transforming fintech, and fintech in turn is transforming banking. At Lloyds Banking Group, we’re embracing this change. We’re partnering with startups, learning from academia, and investing in innovation. We’re doing this not just to keep up, but to lead.  

The UK has a unique advantage in this space, and we’re proud to be part of it. By combining the strengths of big banks with the creativity of startups and the rigour of academia, we believe we can build a better future for our customers and our industry. We’re just getting started, and we’re excited about what’s next. 

Digital technology Fintech Investment

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About the author Ranil Boteju

Group Chief Data and Analytics Officer

Ranil is Group Chief Data and Analytics Officer at Lloyds Banking Group and is responsible for delivering the Group’s Data and Machine Learning Strategy.

Ranil has 25 years global experience transforming businesses and creating value with advanced analytics, data and machine learning platform delivery and data commercialisation.

Prior to joining the Group, Ranil held senior leadership roles at the Commonwealth Bank of Australia, Vodafone, Standard Chartered Bank and HSBC.

Follow Ranil On LinkedIn.

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About the author Kirsty Rutter

Fintech Investment Director

Kirsty has spent 25 years in financial services in roles spanning finance, strategy, risk, data, technology, innovation and strategic investment at six different Top Tier financial institutions.

Kirsty’s passion is organisational growth through cultural change; challenging the ways things “have always been done” and championing the opportunities that new tools and technologies bring.

Today, as the Group Fintech Investment Director, Kirsty uses her diverse experience to support business growth objectives and delivery through strategic fintech investment; focused on creating value by actively managing the portfolio across all businesses.

And whilst she’s doing that, she’s a wife and proud mum to two boys; who she says have taught her more than anything else she’s ever done.

Follow Kirsty on LinkedIn.

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