Lloyds Bank is exploring the use of a cloud-based core banking platform developed by UK fintech Thought Machine. The start-up provides a cloud-based banking infrastructure, known as Vault. The company was founded in 2016 by ex-Google executives, including Paul Taylor, the company’s former head of text to speech and current Chairman. At the time, its product was promoted as offering a real-time, high-volume cloud architecture, with the ability to conduct billions of transactions a day, with cryptographic security via private centralised ledger and smart contracts to enable banks to quickly launch new products. The platform utilises smart contracts, shortening the time it takes to launch new products, allowing customers and banks to agree terms and sign off highly personalised agreements in a fraction of the time. The relationship with Thought Machine came about through IBM, with which the bank has an outsourcing contract worth £1.3 billion over seven years. This is part of an ongoing, large-scale transformation project at the bank. Transitioning to a managed core banking service in the cloud will likely allow Lloyds increased flexibility and scalability, and relieve issues with legacy architecture, such as data processing. However, it puts control of the core banking architecture outside the bank. “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.
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