Tokenisation set to transform financial services, say UK’s largest financial institutions

As financial institutions invest in technologies that could reshape the future of the industry, senior leaders increasingly believe tokenisation could play a transformative role in how money and assets move through the financial system.

Nearly three quarters (71%) of the UK’s largest financial institutions expect tokenisation to reshape the future of financial services, according to Lloyds' tenth annual Financial Institutions Sentiment Survey. The survey of 100 senior decision-makers across the UK's largest banks, insurers, financial sponsors and asset and wealth managers explored the technologies and trends expected to shape the future of financial services.

Tokenisation enables assets such as cash, bonds and funds to be represented digitally on blockchain-based infrastructure and transferred more efficiently. It achieves this while retaining the protections and safeguards associated with traditional financial assets.

Why does tokenisation matter?

By bringing assets and payments onto digital infrastructure, tokenisation can support faster settlement, more efficient collateral and liquidity management, and allow transactions to be processed automatically when certain conditions are met. This can simplify financial processes and reduce operational complexity.

As a result, for financial institutions and corporates, tokenisation could help free up capital and liquidity tied up in financial transactions, allowing it to be deployed more efficiently elsewhere. By reducing the time and resources needed to move money and assets, it could support increased lending, investment and innovation across the economy.

When asked about the key benefits, financial institutions identified faster payments and settlement as the biggest opportunity from tokenisation, cited by 60% of respondents. This was followed by collateral and liquidity management (41%).

Investment accelerates as digital infrastructure becomes a strategic priority

The growing focus on tokenisation is taking place alongside a wider acceleration in technology investment across financial services. More than three-quarters (77%) now identify investment in new and emerging technologies as a growth priority, almost doubling from 41% in 2025, while 64% plan to increase capital expenditure over the next 12 months.

Modernising financial and market infrastructure was also identified by respondents as one of the UK’s greatest economic opportunities over the coming year, underscoring the potential benefits of upgrading the systems that underpin the movement of money and capital across the economy.

Lloyds is already helping shape the development of digital assets working with industry partners to demonstrate how digital assets such as tokenised deposits and tokenised securities can be used to support faster settlement and more efficient movement of collateral and liquidity.

For example, earlier this year, alongside Archax and the Canton Network, Lloyds completed the UK's first public blockchain transaction using tokenised deposits to purchase a tokenised gilt, demonstrating how tokenisation could transform the way money and assets move through the financial system.