A safe space to test ideas, the Sandbox is a digital environment which lets the bank run ‘proof-of-concepts’ with fintechs using synthetic data to gauge just how valuable their products and services may be.

"For us it’s been a key milestone in the way we work, offers a much smoother way to partner with fintechs and has significantly sped up our collaboration process," says Lloyds CTO Victor Weigler. "Before the introduction of the Innovation Sandbox, the process by which our business areas could carry out early stage evaluations was lengthy, convoluted and often costly for the fintechs involved. This, in turn, hindered our ability to collaborate at pace."

He says early experiments with a variety of fintech businesses has shown that the timeline of activity from start to finish is five times faster than other similar previous fintech engagement exercises.

The Sandbox itself now features an integrated marketplace of more than 100 fintechs, over 500 APIs, and more than 100 datasets.

Says Weigler: "In practice, this means we can deliver better results more efficiently and effectively by bringing business areas and fintech together securely, and facilitating data-driven decision-making."

To date, experiments have been focussed on developing new sustainable solutions for commercial customers alongside new retail customer propositions. Future areas earmarked for exploration include the potential of emerging technologies such as distributed ledger technology.

The sandbox is one a number of initiative underway at Lloyds to refine its fintech partnership programme. The bank also runs a Launch Innovation Programme in concert with Fintech Scotland to size up potential partnerships. From the 2022 cohort, contracts have been signed for five experiments, a further three are still in the pipeline and there was also a £4 million investment from the bank's dedicated fintech investment team.

The bank is also working with Fintech Scotland and other incumbents to map out a set of set of common criteria for onboarding startups in the form of a 'Fintech Passport'.

"Simply put, this will allow fintechs to onboard faster by knowing in advance what they need to prepare in order to satisfy the stringent and often regulatory requirements that organisations like Lloyds Banking Group need to follow," says Weigler. "It’s in collaboration with fintechs - in working with and alongside them to meet the demands of our customers - that we can create adjacent services, access advanced technical capabilities and support in the development of innovative industry solutions."