Digital Disruption's Impact on Banking & Competition: Lloyd's Study

This dissertation investigates the impact of digital disruption on the banking sector and its competition, with a specific focus on Lloyd Banking Group. It begins by defining digital disruption and its role in transforming financial services, highlighting how digital technologies improve business operations and address challenges like high transaction costs. The research problem centers on the challenges of adopting advanced technology and ensuring employees have the necessary knowledge. The study aims to understand digital disruption within the banking sector, identify the impact of disruptive technologies on transactions, and assess the effects of digitalization on the UK banking sector. The literature review explores digital disruption, its benefits (increased customer satisfaction, growth, workplace evolution), and provides historical context. The research employs a qualitative methodology to gather and analyze data, using thematic analysis to deliver detailed insights. The dissertation concludes with recommendations for companies to effectively navigate the competitive environment.

DISSERTATION
(Impact of digital disruption on banking sector
and its competition)

Table of Contents
INTRODUCTION...........................................................................................................................3
Background of the research.........................................................................................................3
Research problem........................................................................................................................4
Research aim, objectives and questions......................................................................................4
Rationale of the research.............................................................................................................5
Dissertation structure..................................................................................................................6
LITERATURE REVIEW.................................................................................................................8
The digital disruptive within banking sector...............................................................................8
Impact of Digitalisation on banking sector of United Kingdom...............................................10
How digitalisation affected the banking sector of United Kingdom?.......................................13
RESEARCH METHODOLOGY ..................................................................................................17
DISCUSSION................................................................................................................................21
CONCLUSION AND RECOMMENDATIONS...........................................................................27
Conclusion.................................................................................................................................27
Recommendations.....................................................................................................................28
REFERENCES..............................................................................................................................30

INTRODUCTION
Background of the research
Digital disruption can be defined as changing the provision for services and may also
helps in solving the problems faced by financial markets due to competition like high transaction
costs or high switching costs. Digital technologies help in improving the business operations of
the company in order to achieve high growth and success in the competitive market (Vives,
2019). With the changing dynamic environment, digital technologies play a very important role
within the banking sector as it helps in improving the overall business performance. In simple
words, digital technologies are electronic systems, tools, resources and devices that store, process
or generate data. Some examples related to digital technologies that help business organisation
are online games, social media, mobile phones and multimedia. It mainly helps in bringing
change within the working culture of the business that results improving the performance and
productivity of employees. Technology helps in reducing the workload of employees so that they
complete the work on time in order to attain the predetermined objectives and goals of the
business. With the help of digital technologies the business can increase the efficiency of
products, services and systems. It helps in streamlining and tracking the processes, manage
contacts and maintaining data flow and employee records. Changing technology also leads to
digital disruption and effects the performance of employees that work towards achieving high
growth and success within the competitive market. Digital disruption is the strategic shift in
business industry, market, models, process technologies, behaviour and expectations of
consumers caused because of new digital businesses, services and products. In order to gain
success in the competitive banking sector, it is important for the business organisation to adopt
new and advanced technology so that their overall business processes can be improved. It also
drives innovation in a organisation, and allows organisations to improve traditional methods of
banking transactions and adopt new technology for improving product quality, efficiency,
profitability and productivity. The aim of digital disruption helps in dealing with the changing
consumer needs and results in keeping existing customers happy and opening up for new
opportunities. With the help of digital technology, the company can improve the sale of their
products in the business market in an effective manner (YuSheng and Ibrahim, 2019). It makes
the marketing more interesting and manageable which results in making the performance of the

company more healthier and helps in making it grow in the highly competitive business market.
Digital technology has its own advantages and disadvantages for the company that affects the
operations of the business and will face difficulties in achieving the set aim and objectives. It
also helps in improving the brand image of the business against the competitor companies and in
achieving high competitive advantage within an organisation. There are different digital
technologies which the organisation use for achieving high growth and productivity such as
robotics, blockchain and artificial intelligence. This has brings a smart change in the banking
industry so that they achieve growth in the upcoming future and in gaining more number of
customers within the business market.
The chosen company in the carrying out the present research is Lloyd Banking Group. It
is considered as a British financial organisation which is formed by the acquisition of HBOS by
Lloyds TBS in the year 2009 (Coman and Lloyd, 2022). It is also known as one of the largest
organisation that delivers financial services and mainly includes around 30 million of customers
and around 65000 employees that work in the company. It has strong digital presence in the
market and is known for providing efficient and better services to the customers for creating a
good existence in the business market. The group has a unique proposition of customer that
enables to serve the financial needs to the customers at only one place.
Research problem
The main problem identified in the present research is the problem of adopting advanced
technology within an organisation because it requires more investment. It is important for the
company to use modern technology so that they deal with the changing marketing situations in
an effective manner. Another problem that the company will face is having proper knowledge
about the technology so that they understand their work in a proper manner. It is important for
the company to train and develop their employees in an efficient manner so that they work more
productively.
Research aim, objectives and questions
Research aim:
To identify the impact of digital disruption on banking sector and its competition: A study
on Lloyd Banking Group

Research objectives:
 To understand the concept of Digital Disruptive within banking sector
 To identify the impact of disruptive technological advances on transaction in banking
sector
 To know the affect of Digitalisation on banking sector of United Kingdom
Research questions:
 What is the digital disruptive within banking sector?
 Which are disruptive technological advances impacting the transaction of Lloyd banking
industry?
 How digitalisation affected the banking sector of United Kingdom?
Rationale of the research
The main purpose of carrying out the present investigation is to identify the overall
impact of digital disruption on the banking sector. The present investigation mainly focus on
determining the role of digital disruption and its overall effect on the performance and
productivity of the banking sector (Anagnostopoulos, 2018). Advancement of technology helps
in bringing new ideas and innovativeness within an organisation so that the work can be
completed in an effective and efficient manner. The main idea behind carrying out this
investigation the researcher fulfils two objectives that are defined as personal and professional.
In terms of personal objective, the researcher will gain knowledge about the effect of digital
disruption within the banking sector. This will also help in knowing about the new tools and
methods which results in doing the business operations in an effective manner. Another benefit of
understanding this concept is to know the benefit of dealing with the issues related to the work so
that they attain all the aim and objectives in an effective manner. On the other hand, in terms of
professional objective, the researcher will help in attaining right skills and knowledge about the
topic which helps in getting the right job. Another benefit of gaining professional knowledge also
helps in building a good career in this field and also results in assisting in solving the problems
that occurs in an organisation in a more effective manner.

Dissertation structure
In the dissertation structure there are different chapters that are generally covered while
conducing the research. They are generally used for assisting effective completion of each
activity that are included in the report in order to complete the research in an efficient and
signifiant manner. The following chapters are defined as under:
CHAPTER 1: INTRODUCTION: This is considered to be the most important chapter of the
research that mainly involves background of the research, research aim and objectives, problem
statement, research rationale and structure. It mainly helps the in providing an overview about
the topic so that other chapters can be completed in an appropriate and effective manner.
CHAPTER 2: LITERATURE REVIEW: Literature review is the second chapter of the
research that helps in addressing the research questions in a detailed manner with stated facts and
figures. This is a part of the secondary data and helps in carrying out the discussion in a proper
way. The data is generally collected from different sources such as online sites, journals, articles,
books and so on. This helps in delivering better and authentic information about the topic in a
summarised manner.
CHAPTER 3: RESEARCH METHODOLOGY: Research methodology is considered as a
third method in the research which helps in gathering and analysing information on the given
topic in a effective manner. This mainly includes various methods such as philosophies,
strategies, approach, choice, data collection and data analysis, sampling, time horizon and many
more. With the help of this chapter the researcher can maintain the overall reliability and validity
about the collected information about the selected research topic. In the present research the
researcher has selected qualitative research method for gathering detailed information about the
topic.
CHAPTER 4: DATA ANALYSIS AND FINDINGS: This is also considered to be an important
chapter that help in delivering better outcomes about the given research topic in an effective
manner. It is mainly categorised into parts that is qualitative and quantitative for analysing
authentic and accurate information. In case of quantitative research, the researcher will use
questionnaire by frequency distribution whereas in qualitative research, the researcher will use
interview for carrying out the information about the topic in a more effective manner. In
conducting the present research, the researcher has selected thematic analysis for delivering
detailed information about the given research topic.

CHAPTER 5: CONCLUSION AND RECOMMENDATION: Conclusion and
recommendation is considered as the last chapter of the research helps in summarising the
collected information in short form so that the research can be completed in a proper manner.
Recommendation is a part that the company must consider for fighting with the competitive
environment in an effective and efficient manner.

LITERATURE REVIEW
The digital disruptive within banking sector
According to the view of Stewart, Khare and Schatz (2022) digital disruption is a term
which means the changes that happens when new digital services, technologies, business models
and capabilities get affects as well as the change the value of the industry's current goods and
services. These elements new disrupt or change status quo of the company as well as force
businesses to reevaluate the current market related to the product and service as well as possibly
adjust. History has certain examples that describes that the superior technology change the status
quo. This electric lights replaced the oil lamps and candles, auto mobile replaced the buggy and
horse, mobile phones closed landline superiority as well as video killed the radio star. In last,
digital disruption means change which can be good and bad. Digital disruption involves potential
of being a challenging and painful process that offers various benefits to the company. The first
benefit that digital disruption offers is help in increasing the customer satisfaction. In today's
time, customers wants more innovation, variety, and all those which is it delivered yesterday.
Mass media makes customer more informed as well as more discern. It also be beneficial for
digital disruption. Digital disruption spurs companies in order to the challenges of today's
customers by making them ahead of the technical curve as well as incorporating the latest
changes faster. It also offers a bug data and analytics to the company which helps them to
leverage into more effective sales by gaining insights about the consumer buying behaviour.
Digital disruption helps company to make their marketing more manageable which results into a
healthier company overall (Thirulchelvam, 2021) . The other benefit that the company gain from
digital disruption is it helps company to grow. Digital disruption create radical change, pull
companies out of their comfort zone as well as move them forward. It leads growth of the
company as well as gain more competitive advantages. When the refuse to adapt and change
with digital disruption may doomed to be fail as well as loose their competitive position. Another
benefit that the company gain from digital disruption is it improves and evolves the workplace.
Digital disruption helps in brining new technology and innovations in the workplace. The new
collaboration software, workflow management tools, mobile device as well as cloud technology
in the workplace that have driven digital disruption. In other words, digital disruption within
banking sector is an important term because it is provide many factors that is help in technical

development within the sector. It is the term that is helps to change the overall provision of
services of the sector digitally.
As per the view of John (2021) digital disruption refers to a transformation which is
caused by emerging business models and emerging digital technologies. These innovative
models and new technologies may affects the values of current product and service which is offer
by the industry in the market. The emergence of these new digital services, product and
businesses disrupts the present market as well as causes the need for re-evaluation. Digital
disruption is considered as the unstoppable force as well as and to try and fight it is futile. It
helps in marking the changes in the needs of consumer. Therefore, working with the tide allow
company to fulfil emerging need of customers as well as keep their existing customer happy and
open opportunities for new customers in order to identify what they want from their brand. There
are many benefits that an organisation gain through digital disruption. It help company to
increase their business growth by fulfilling the emerging and new needs of customers. It also
help company to make their customers happier as well as satisfied. As the advanced analytics and
big data provide proper insights about the customer behaviour and other trends in order to
understand their customers in better manner.
In the opinion of Mitra, Kapoor and Gupta (2020) digital disruption is define as an effect
that the change the principle behaviours and expectations in a market, culture industry or process
which is expressed through or caused by digital capabilities, assets or channels. It can also be
describe as the change that occurs when the new business models and digital technologies affects
the value proposition of current goods and service. Change is considered as the digital factor that
define digital disruption. It is all about the changing things as well as defining things in order to
dislodged the status quo. Digital disruption gives the way for growth and evolution as well as the
companies that adapt the changes can gain benefits related to the new opportunities that the
digital disruption provides. The internal and external working of an organisation may become
more difficult as when the company grows as well as needs and requirements that help them to
keep the whole organisation move change as well. Digitalisation in the business process is a kind
of digital disruption which is most important in making the organisation cost effective, more
efficient, productive as well as more customer friendly. Digital disruption is also considered as
the use of business intelligence as well as big data. It allows leaders, executives and other
decision markers to become able to make decision more informed that are based on reliable

information as well as solid data (Franco, 2018). Better and improved decision making help
organisation in order to evolve, grow as well as remain relevant. Digital disruption also create
innovation in an organisation and allows them to exceed outdated standards as well as reach
towards the heights in respect of product and service, productivity, efficiency, quality as well as
profitability. It enables companies to address the new wants and needs of customers whose
demands and tastes will change all the time. The innovation which is driven by the digital
disruption is responsible for the insights in management that provide the way for the company to
achieve success as well as give edge to the business (Duggan, 2019). It is also important in a
highly competitive market where the customers are becoming more discerned and informed.
Impact of Digitalisation on banking sector of United Kingdom.
As per the viewpoint of Abbasov, Mamedov and Aliev (2019) digitalisation refers to a
conversion of data into an online format with the help of technology. Adoption of digitalisation
plays a very essential role in the banking sector. By encouraging digitalisation banks can give
improved customer service, more convenience to customers together with time saving. It also
helps in reducing human error while developing customer loyalty towards the bank. There are
many benefits that can be provided to customers such as facilitating them cashless transactions
so that they do not need to carry cash anymore and make transactions at any time and place
(Abbasov, Mamedov and Aliev, 2019). In case of Lloyd's, the following are impacts of
digitalisation in banking sector:
 Increased customers: One of the key benefits that digitalisation provides to a banking
sector is the increased customer base. A progressive number of people are depending on
digital banking solutions. The contrast of burdensome and slow traditional banking also
works in support of online banking. Therefore, digitalisation has delivered an increase
number of customers for the respective bank which is a noteworthy change that
digitalisation provide to the banking organisations.
 Enhanced efficiency: Digitalisation is also necessary for banking organisations as it
delivers positive impact of efficiency to them. Digitalization brings accuracy and speed in
banking which significantly introduce new levels of organisation. Digitalization has
altered the whole art and mathematics of banking by bringing efficiency ease and extra
productivity on the counter. For example, digitalisation bring several benefits to the

respective organisation such as smartphone based banking applications, electronic
signatures, quicker transactions and much more.
 A user friendly experience: If one takes a stroll towards the artistic side of modern
technology and digitalisation regarding banking sector then it is found that it has crafted a
differentiated and user friendly experience that never occurred before. In ancient times,
banking services was a symbolic of a slow along with tiring queue that never ends. But,
nowadays, it feels like certain simple clicks (Wadesango and Magaya, 2020). Due to the
digitalisation banking now fonts a user friendly experience and become more efficient
and desirable for customers. It has brought massive convenience to customers around the
world and there is no room to question the benefits of digitisation in current scenario.
After taking consideration of spending patterns and preferences, public behaviour and
other essential data the banking organisations now seems to have reached the use of
digitalisation.
From the viewpoint of Paulet and Mavoori (2019) digitalization in banking sector started
develop from the past decades with the creation of the internet. Traditionally, bank organizations
to give customers with digital banking services. This is proved a success which led to more
banks spreading their services digitally. Also, banking providers do not need to have a physical
presence on the high street of provide all the banking services that customer needs. Also, it is
researched that there is always a second side of the coin and digitalization has also negative
influences in the banking sector. In context of Lloyd, the impacts of digitalization have been
mentioned below:
 No personal relationships: In ancient times, banks who have branch on the high street
tend to cater more customised service which can be a benefit if one extra banking
services such as loan or mortgage (Paulet and Mavoori, 2019). If customer need to make
modifications to the terms of account, the bank manager generally has some preference if
individual circumstances do change. Furthermore, in digital banking system, the
customer may not be able as available for some people and can be hard to understand and
navigate. Hence, speaking to a person, direct connection and communication may be a
cherished experience to get up as well as running with digital banking.
 Spending money has become a little too easy: With the advancement in digitalisation,
customer utilises several digital payment methods to make a payment together with for

the money to be withdrawn from the account. One of the great examples is Google pay.
As customers are not dealing with physical money, and there has been increase in the
spend. Withdraw and receive of payment on digital account happen so easily and without
having extra effort on it, the customer easily forgets about that, this works well for
authorised payment such as bank transfer, direct debits but they need to be aware of an
authorised transaction as well (Urbach and Röglinger, 2019). Although the customers
have the option to track and see spending visions in order to see that where they use their
money.
 Cyber-crime: Digitalisation in banking sector a subject to cyber-attacks as well. The
chosen company also faces of threat of data being lost or compromised by the attackers
which creates poor financial performance of the business. The customer can become a
victim of internet fraud if they do not follow security measures which is introduced by
the bank such as not sharing passwords, not having a strong password or not logging out
from the internet banking account.
 Internet requirement: Digitalisation always require customer to have good internet
services in order to make a transaction from their account. Therefore, an access to
internet banking service can delay if the internet connection is not available. It is also
influenced when bank servers are down.
According to the point of view of Singh and Srivastava (2020) discruptive technology is
refer to the innovation that alters the direction that industries, businesses operation or consumers
significantly. It is the technology that is easy to use and plug and play IoT infrastructure and
robust sensors. Disruptive technology is one of the most important technology that displaces and
shakes up and established technologies the industries or breaking products that is helps to create
a new industry completely. Disruptive technologies defined as in five terms such as artificial
intelligence, block chain, 3D printing, IoT, and VR/AR etc. which is expecting the good and bad
outcomes both. In relation to disruptive technological advances on the transaction in banking
sector, digitalisation is an important term that is helps to transform the activities and process of
business operation digitally (Albayati, Kim, and Rho, 2020). In the terms of banking sector, it is
impacting the sector in many ways such as it is improving the cost efficiency, it is helps in data
driven decisions, it is saving the time and money of the customer, it is impacting on the
employee performance, customers satisfaction, it is impacting to improve the performance,