Name: Lloyds Bank at Sibos 2023 – What’s next for CBDCs and AI
Uploaded: 2023-10-03T14:59:12.987Z
Duration: 699.77
Description: At the Sibos 2023 conference in Toronto, FinTech Futures sat down with Sarah Saigol, Managing Director, Cash Management and Payment Solutions at Lloyds Bank, to discuss the current sentiment among financial institutions surrounding central bank digital currencies (CBDCs) and artificial intelligence (AI) and what the future might hold for digital money.

14-Sarah Saigol1.mp4

14-Sarah Saigol.vtt

ENGLISH

{{00:00:06}}
This is FinTech Futures at Sibos, and I am
joined by Sarah Saigol from Lloyds Bank.

{{00:00:10}}
Sarah, thank you so much for taking
the time out to speak with us.

{{00:00:13}}
Just get started with us, give
us a quick introduction to

{{00:00:15}}
yourself and your role at Lloyds.

{{00:00:17}}
Good afternoon, so I run the Cash
Management and Payments business

{{00:00:20}}
in the Corporate Institutional Bank
at Lloyds, so I'm responsible for

{{00:00:23}}
the product and the distribution
of all of our transaction banking

{{00:00:26}}
colleagues, products to our corporate
clients and our institutional clients.

{{00:00:31}}
Excellent, excellent.

{{00:00:32}}
And you're here speaking on a
panel about whether the future

{{00:00:34}}
of money is digital and instant.

{{00:00:35}}
Excellent.

{{00:00:35}}
For those unable to attend, we'd like
to give us a quick breakdown of what you

{{00:00:39}}
talked about in that discussion and sort
of the key takeaways to come from it.

{{00:00:42}}
Yeah, that's right.

{{00:00:42}}
So it was first thing on Monday
morning, which feels like a lifetime

{{00:00:45}}
ago now in terms of SlyBoss time.

{{00:00:48}}
But it was a great panel.

{{00:00:48}}
I really enjoyed being part of it.

{{00:00:51}}
We had a really diverse panelist
collection, so we had UK India, Middle

{{00:00:58}}
East, and the US represented, and I
think that was one of the the key things

{{00:01:04}}
that came out of the panel is that the
take up of instant payments and faster

{{00:01:08}}
payment schemes across the world as well.

{{00:01:10}}
Behaved very differently depending on
the geography, so obviously being taken

{{00:01:14}}
up very rapidly by retail customers in
the UK, gradual adoption by corporates,

{{00:01:19}}
slower in the US, but a massive explosion
of activity in India through COVID as

{{00:01:25}}
banking inclusion has, really taken hold
on that sort of Middle Eastern economy and

{{00:01:31}}
really interesting to see how different
countries and different populations have

{{00:01:36}}
adopted the different payment methods.

{{00:01:39}}
There were some common themes,
though, I think, that came through.

{{00:01:41}}
I think lots of countries having
capability to manage domestic

{{00:01:47}}
faster payments now, in a a very
efficient and well adopted way.

{{00:01:52}}
However, when you start to look across
borders the interoperability between...

{{00:01:57}}
Countries still feels quite fragmented and
the need for collaboration and cohesion

{{00:02:03}}
driven by regulators and regulatory and
compliance policies needed to drive,

{{00:02:11}}
drive through some cohesion on an
international level to ensure we've got

{{00:02:14}}
proper cross border interoperability
for cross border payments in the future,

{{00:02:20}}
we talked a lot about the, topics of
fraud and security, which seems to be

{{00:02:24}}
something that's on everybody's mind.

{{00:02:26}}
So lots of the meetings that I've had this
week in Cyboss, that's been a key theme,

{{00:02:29}}
and how can we ensure that we've got the
best fraud detection techniques to protect

{{00:02:34}}
customers from the sort of enhanced risk
of irrecoverability of faster payments?

{{00:02:39}}
And then we couldn't walk past the
sort of the tech challenge of being

{{00:02:43}}
part of a large bank, and how do we
partner or how do we build ourselves?

{{00:02:48}}
to be able to create truly customer
centric journeys because that's

{{00:02:53}}
really what's going to drive the
adoption of instant payments.

{{00:02:56}}
It's creating a journey for the
customer that brings them value.

{{00:02:59}}
So it was a fascinating discussion.

{{00:03:01}}
Excellent.

{{00:03:02}}
And one of the topics I wanted to
talk to you about today was CBDCs.

{{00:03:05}}
So I know Lloyd's recently released
its Financial Institution Sentiment

{{00:03:07}}
Survey, and one of the things
covered on that was CBDCs and

{{00:03:10}}
whether institutions would welcome
or not the digital pound in the UK.

{{00:03:13}}
Can you tell us what the
conclusions were from that?

{{00:03:16}}
Yeah, sure.

{{00:03:16}}
So the Financial Institution
Sentiment Survey is is the

{{00:03:20}}
eighth one that we've run.

{{00:03:21}}
We survey a hundred different
senior decision makers across banks

{{00:03:25}}
and non bank FIs in the UK to get
their state of the nation on the

{{00:03:30}}
UK financial financial economy.

{{00:03:33}}
And one of the questions we were
interested to find out more about

{{00:03:37}}
this year was what were the attitudes
towards the adoption of a CBDC?

{{00:03:42}}
I wasn't surprised by the outcome.

{{00:03:45}}
Whilst around a quarter of the
respondents said that they welcomed

{{00:03:48}}
the idea of a CBDC about a third
didn't welcome it, and the majority...

{{00:03:57}}
I didn't see the use case and I think
it is early days, and I think it's

{{00:04:04}}
nascent technology and we really need
to continue to work together to identify

{{00:04:10}}
where the real need for CBDC in a
developed economy would manifest itself.

{{00:04:18}}
From your perspective, do you
see this picking up over time?

{{00:04:20}}
Do you see that eventually maybe if
we look a few years down the line

{{00:04:23}}
that more people will start actually
seeing the use cases for this?

{{00:04:26}}
So I think it depends where you're based.

{{00:04:30}}
In a developing economy, so like Nigeria,
for instance, where they have a central

{{00:04:34}}
bank digital currency, you can see
the clear use cases around financial

{{00:04:39}}
inclusion, around fraud and security.

{{00:04:42}}
In the UK, We're at an earlier
stage in the journey, having a very

{{00:04:47}}
developed financial system already.

{{00:04:50}}
I think it's, the analogy is why why
build the telephone line if you can go

{{00:04:55}}
straight to mobile for some developing
economies where we already have really

{{00:04:59}}
good technology and infrastructure that
supports a functional financial system

{{00:05:04}}
in economies like the UK and the US.

{{00:05:08}}
So it's it's harder to see
the immediate use case.

{{00:05:10}}
However, as as one of the biggest UK
banks, we are committed to working

{{00:05:16}}
with the Central Bank to look at
the the potential deliverability

{{00:05:22}}
and applicability of this.

{{00:05:25}}
And I do think over time it
will become clear as we start

{{00:05:28}}
to test our foot in the water.

{{00:05:31}}
with some initial use cases, which I
imagine will be in the wholesale market

{{00:05:35}}
because one of the responses in the survey
really was that there was a lack of trust

{{00:05:41}}
and understanding was the perception
amongst the retail customer base.

{{00:05:46}}
Moving forward as well do you think
with the amount of research that's being

{{00:05:50}}
done at the moment, the amount of trials
that are being run, it's more just a

{{00:05:52}}
matter of time, when it's going to come
in as opposed to if it's going to come

{{00:05:57}}
in so, I can't comment on open policy
decisions that are currently live with

{{00:06:05}}
the, UK Treasury and the Bank of England.

{{00:06:07}}
Obviously we've taken part in the
consultancy period we're waiting for

{{00:06:11}}
the outcome of that consultation which
closed in June, and then we expect a

{{00:06:15}}
decision on the UK digital pound by 2025.

{{00:06:21}}
So we will continue to work with the
Bank of England and other institutions

{{00:06:25}}
to to understand what the benefits of
a CBDC would bring to the financial

{{00:06:31}}
system, the economy and consumers.

{{00:06:34}}
I think one thing's for certain
though if, we do go down the route

{{00:06:37}}
of a digital pound, we will need a
really clear transition plan from the

{{00:06:41}}
regulators that, that sort of sets out
how this will work from, an economic

{{00:06:46}}
Macroeconomic perspective, how it will
impact the banks, how it will impact

{{00:06:50}}
corporates, and how it will impact
consumers, because I think that's

{{00:06:54}}
all very unclear at the present time.

{{00:06:57}}
What steps then you mentioned
obviously Nigeria have already

{{00:07:00}}
implemented CBDC over there.

{{00:07:02}}
What kind of steps are the UK
financial institutions taking to...

{{00:07:06}}
really make sure that they're
prepared for CBDCs being developed

{{00:07:08}}
in other countries as well.

{{00:07:09}}
Yeah the results of our survey
showed that most respondents were

{{00:07:14}}
not actually taking active steps.

{{00:07:17}}
12 percent only were partnering with
FinTechs and other businesses to

{{00:07:21}}
try and get themselves tech ready.

{{00:07:23}}
for the potential of a CBDC, other
institutions around 10 percent were

{{00:07:29}}
looking to take on skilled workers
who had the, sort of the, skill in

{{00:07:34}}
this and the knowledge in this market.

{{00:07:37}}
It feels at quite nascent
stages at the moment.

{{00:07:40}}
From Alloyd's perspective, though, we
are an investor and we're a We are a

{{00:07:43}}
participant in Finality, which will be
the first UK regulated DLT technology.

{{00:07:50}}
So we are working on use cases
as how we can make money smarter.

{{00:07:55}}
And we, will continue to, look for those
those use cases, probably primarily,

{{00:08:00}}
as I say, in the wholesale markets,
the regulated liability network.

{{00:08:04}}
likely bit, Regulated Liquidity
Network, likely being the

{{00:08:07}}
first place that we will start.

{{00:08:09}}
And then the use cases can branch out
from there once we've tested the concept

{{00:08:13}}
and made sure that the technology works.

{{00:08:17}}
However I, think there are some
really interesting developments

{{00:08:21}}
that are going on outside of the UK.

{{00:08:22}}
So if you look at Partior in
Singapore that looks like a really

{{00:08:26}}
interesting use case in terms of how
we can use DLT technology to speed

{{00:08:31}}
up and make, more instant and...

{{00:08:34}}
Create 24 7 capability
for cross border payments.

{{00:08:37}}
And actually, of our respondents that
did welcome a digital pound, over

{{00:08:40}}
60 percent of them said cross border
payments was the area they expected

{{00:08:44}}
to see some of the benefits arising.

{{00:08:46}}
Looking at those developments overseas
as well as what's going on in the UK.

{{00:08:50}}
Excellent.

{{00:08:50}}
And away from CBDCs then AI was another
key focus of the survey as well.

{{00:08:55}}
Another huge topic that's been
across industries now, especially

{{00:08:58}}
at financial services, it's been
discussed a lot at CYBOSS as well.

{{00:09:01}}
What were some of the things
that came out from that?

{{00:09:03}}
Yeah, so unsurprisingly over half of
our respondents were interested in the

{{00:09:08}}
opportunities that AI could bring to their
business in a particularly in terms of

{{00:09:13}}
improved profitability and productivity.

{{00:09:17}}
And I think from all we've heard
about AI at Cybus this week, you can

{{00:09:21}}
see that it's a clear industry trend.

{{00:09:25}}
Strangely, only about a third of our
respondents were actively investing

{{00:09:29}}
in AI technology at the present time.

{{00:09:31}}
I think there's a quote in the survey
where Paul Donger, our head of data

{{00:09:35}}
and AI ethics at Lloyds Banking Group,
said if, Organizations are not actively

{{00:09:42}}
investing, they could be losing ground
and getting left behind compared to their

{{00:09:45}}
competitors and so that's why I think it
is important to start looking at use cases

{{00:09:50}}
for, AI and, start actively investing and
implementing them across business models.

{{00:09:55}}
I suppose off the back of that, how
has Lloyd's been actively trying

{{00:09:58}}
to tap into this technology then?

{{00:10:01}}
AI is not something that's
stranger to how we work at Lloyd's.

{{00:10:05}}
We've been using natural
language processing and machine

{{00:10:09}}
learning for quite some time.

{{00:10:11}}
I suppose the primary use cases are
around how can we use web chat and

{{00:10:16}}
chatbots to improve the customer service
experience and availability for customers.

{{00:10:23}}
Things like how can we improve
our manual operational processes

{{00:10:26}}
through the use of robotics to create
better efficiency and accuracy.

{{00:10:31}}
How can we use machine learning
to drive some of our forecasting

{{00:10:36}}
capability, for instance, in terms
of our current account balances.

{{00:10:40}}
How do we manage our
liquidity and funding?

{{00:10:41}}
So loads of really tangible use
cases that create benefit for the

{{00:10:47}}
group in terms of colleague or
client experience or our bottom line.

{{00:10:52}}
Profitability and productivity where I
think it's, more, it go more exciting

{{00:10:58}}
is that we started partnering with,
FinTechs that are actively using

{{00:11:02}}
AI to create a sort of unique and
beneficial customer experiences.

{{00:11:07}}
So in June we announced a partnership.

{{00:11:09}}
with FinTech, who are an AI and machine
learning based rules engine, creating

{{00:11:16}}
a platform for customers to create a
hypo automated, real time, treasury

{{00:11:20}}
and payments management system.

{{00:11:22}}
We're really excited about
the opportunities bringing

{{00:11:25}}
that to our client base.

{{00:11:27}}
Excellent.

{{00:11:27}}
Yeah, exciting times ahead.

{{00:11:28}}
Thank you, Sarah, again, so much
for taking the time out to speak.

{{00:11:30}}
This has been a pleasure.

{{00:11:32}}
Thank you.

{{00:11:32}}
Thank you very much.

{{00:11:33}}
Thank you.

This is FinTech Futures at Sibos, and I am
joined by Sarah Saigol from Lloyds Bank.

Sarah, thank you so much for taking
the time out to speak with us.

Just get started with us, give
us a quick introduction to

Good afternoon, so I run the Cash
Management and Payments business

in the Corporate Institutional Bank
at Lloyds, so I'm responsible for

the product and the distribution
of all of our transaction banking

colleagues, products to our corporate
clients and our institutional clients.

And you're here speaking on a
panel about whether the future

For those unable to attend, we'd like
to give us a quick breakdown of what you

talked about in that discussion and sort
of the key takeaways to come from it.

So it was first thing on Monday
morning, which feels like a lifetime

We had a really diverse panelist
collection, so we had UK India, Middle

East, and the US represented, and I
think that was one of the the key things

that came out of the panel is that the
take up of instant payments and faster

payment schemes across the world as well.

Behaved very differently depending on
the geography, so obviously being taken

up very rapidly by retail customers in
the UK, gradual adoption by corporates,

slower in the US, but a massive explosion
of activity in India through COVID as

banking inclusion has, really taken hold
on that sort of Middle Eastern economy and

really interesting to see how different
countries and different populations have

There were some common themes,
though, I think, that came through.

I think lots of countries having
capability to manage domestic

faster payments now, in a a very
efficient and well adopted way.

However, when you start to look across
borders the interoperability between...

Countries still feels quite fragmented and
the need for collaboration and cohesion

driven by regulators and regulatory and
compliance policies needed to drive,

drive through some cohesion on an
international level to ensure we've got

proper cross border interoperability
for cross border payments in the future,

we talked a lot about the, topics of
fraud and security, which seems to be

So lots of the meetings that I've had this
week in Cyboss, that's been a key theme,

and how can we ensure that we've got the
best fraud detection techniques to protect

customers from the sort of enhanced risk
of irrecoverability of faster payments?

And then we couldn't walk past the
sort of the tech challenge of being

part of a large bank, and how do we
partner or how do we build ourselves?

to be able to create truly customer
centric journeys because that's

really what's going to drive the
adoption of instant payments.

It's creating a journey for the
customer that brings them value.

And one of the topics I wanted to
talk to you about today was CBDCs.

So I know Lloyd's recently released
its Financial Institution Sentiment

Survey, and one of the things
covered on that was CBDCs and

whether institutions would welcome
or not the digital pound in the UK.

Can you tell us what the
conclusions were from that?

So the Financial Institution
Sentiment Survey is is the

We survey a hundred different
senior decision makers across banks

and non bank FIs in the UK to get
their state of the nation on the

And one of the questions we were
interested to find out more about

this year was what were the attitudes
towards the adoption of a CBDC?

Whilst around a quarter of the
respondents said that they welcomed

the idea of a CBDC about a third
didn't welcome it, and the majority...

I didn't see the use case and I think
it is early days, and I think it's

nascent technology and we really need
to continue to work together to identify

where the real need for CBDC in a
developed economy would manifest itself.

From your perspective, do you
see this picking up over time?

Do you see that eventually maybe if
we look a few years down the line

that more people will start actually
seeing the use cases for this?

So I think it depends where you're based.

In a developing economy, so like Nigeria,
for instance, where they have a central

bank digital currency, you can see
the clear use cases around financial

In the UK, We're at an earlier
stage in the journey, having a very

I think it's, the analogy is why why
build the telephone line if you can go

straight to mobile for some developing
economies where we already have really

good technology and infrastructure that
supports a functional financial system

So it's it's harder to see
the immediate use case.

However, as as one of the biggest UK
banks, we are committed to working

with the Central Bank to look at
the the potential deliverability

And I do think over time it
will become clear as we start

with some initial use cases, which I
imagine will be in the wholesale market

because one of the responses in the survey
really was that there was a lack of trust

and understanding was the perception
amongst the retail customer base.

Moving forward as well do you think
with the amount of research that's being

done at the moment, the amount of trials
that are being run, it's more just a

matter of time, when it's going to come
in as opposed to if it's going to come

in so, I can't comment on open policy
decisions that are currently live with

the, UK Treasury and the Bank of England.

Obviously we've taken part in the
consultancy period we're waiting for

the outcome of that consultation which
closed in June, and then we expect a

decision on the UK digital pound by 2025.

So we will continue to work with the
Bank of England and other institutions

to to understand what the benefits of
a CBDC would bring to the financial

FinTech Futures

Expert Insight

At the Sibos 2023 conference in Toronto, FinTech Futures sat down with Sarah Saigol, Managing Director, Cash Management and Payment Solutions at Lloyds Bank, to discuss the current sentiment among financial institutions surrounding central bank digital currencies (CBDCs) and artificial intelligence (AI) and what the future might hold for digital money.


