Lloyds Banking Group and University of Glasgow Announce Agentic AI Research Programme

WHY THIS MATTERS: This partnership signals a maturation in how major financial institutions approach the Agentic AI wave. Rather than simply buying a tool, Lloyds Banking Group is funding a rigorous, four-year academic study to generate real-world evidence of LLM-based coding agents at enterprise scale. This moves beyond the initial productivity gains reported by competitors (like NatWest’s tenfold productivity increase in pilot programs) to address the crucial question of auditability and trust. As the cost to replace legacy mainframes runs into trillions, the trend is shifting from full digital transformation to AI augmentation. The ability of agents to comprehend entire codebases and automate the software development lifecycle presents a generational opportunity for enterprise agility, provided banks can establish a robust governance layer. For the broader industry, this initiative is not just about internal efficiency; it’s about pioneering the standards and best practices necessary to safely deploy autonomous systems in a highly regulated sector.

A new research partnership between the University of Glasgow and Lloyds Banking Group is setting out to explore the potential of AI to support software and data engineering.

Over the next four years, the partners will explore how large language model-based coding tools called agentic AIs could support and enhance the work of software and data engineers at Lloyds Banking Group.

Each quarter, the partnership will task Lloyds Banking Group’s software and data engineers in Bristol, Manchester and Hyderabad to work with their agentic AI counterparts on a different type of task with the aim to measure the impact on quality and speed of delivery.

As the partnership continues, the Group will develop and improve their understanding of how to harness the benefits of agentic AI. Successful projects will be rolled out across the Group’s wider data teams, and eventually to all software and data engineering teams.

As the UK’s largest digital bank, Lloyds Banking Group is investing significantly in developing new digital software and services, alongside training and new skills for colleagues, to support its 28 million customers.

The collaboration will create a PhD and a Masters of Research position at the University, along with a post-doctoral research associate post to work with Lloyds’ software engineering teams.

Dr Tim Storer, of the University of Glasgow’s School of Computing Science, will lead the University’s side of the partnership along with colleague Dr Peggy Gregory.

Dr Storer said: “Agentic-driven software engineering is a fast-developing sector with the potential to enable human engineers to work more efficiently by automating some tasks and allowing them to focus their skills on higher-level work.

“However, there has been relatively little research in industry on how integrating agentic AI into software engineering practices can be done effectively in large-scale organisations.

“We’re delighted to be partnering with Lloyds Banking Group on this groundbreaking project. Together, we will enable the Group’s plans to increase their software development capacity, produce high-quality research for the benefit of all, and influence national policy and industry standards.”

Lloyds Banking Group’s contribution will be led by Dr Shane Montague, Head of Research Engineering, with executive sponsorship from Professor Andrew McDonald, Enterprise Data Provisioning, Technology Platform Lead.

Dr Shane Montague said: “Lloyds Banking Group’s mission to Help Britain Prosper means leading innovation that genuinely improves how engineering gets done, with a focus on delivering enhanced digital services for our customers.

“We’re excited to partner with the University of Glasgow to gather rigorous, real-world evidence from day-to-day engineering work, so we can understand what really works and how agentic AI can be applied effectively and responsibly at scale.”

Together, the partners will publish regular research papers documenting their work and develop best-practice documents to help organisations of all scales integrate AI into their software and data product development processes.

FF NEWS TAKE: This collaboration moves the needle because it promises a publicly available, academic framework for measuring the impact of autonomous engineering, addressing the current ambiguity around liability and governance. The true value lies in the published best-practice documents and research papers. We should watch for the inevitable regulatory response; rigorous, peer-reviewed data on agent performance is the raw material that will inform new compliance and auditing standards for AI in banking.

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