Britain’s largest financial institutions increasingly see the tokenization of real-world assets not as a distant experiment but as a near-term reshaping of how finance works, according to Lloyds Banking Group’s latest Financial Institutions Sentiment Survey.
In findings published on October 2, 2026, Lloyds said 71% of respondents expect tokenization to reshape the future of financial services. The 10th annual survey covered 100 senior decision-makers across the UK’s largest banks, insurers, financial sponsors, and asset and wealth managers.
The survey also found that 77% of respondents identified investment in new and emerging technologies as a growth priority, up from 41% in 2025. Meanwhile, 64% said they plan to increase capital expenditure over the next 12 months. Faster payments and settlement was identified by 60% of respondents as the biggest opportunity from tokenization, followed by collateral and liquidity management at 41%.
From Concept to Financial Infrastructure
Lloyds defines tokenization as the representation of assets such as cash, bonds, and funds on blockchain-based infrastructure. The bank said tokenization could support faster settlement, more efficient collateral and liquidity management, and automated transaction processing.
Lloyds executives highlighted these potential operational and financial benefits. “Tokenization is a key part of that shift, with organizations exploring how it can help them transact in a safe, trusted environment,” said Lisa Francis, Global Head of CIB Coverage. Rob Hale, Co-Head of Global Markets, pointed to “faster settlement, more efficient use of collateral and better movement of liquidity” as potential benefits that could improve balance-sheet efficiency.
Lloyds Has Tested Tokenized Deposits
The survey comes as Lloyds continues to test tokenization-related infrastructure. In January 2026, Lloyds said it had completed the UK’s first public-blockchain transaction using tokenized deposits to purchase a tokenized gilt, working with digital-asset exchange Archax and the Canton Network.
The transaction involved Lloyds issuing tokenized deposits on the Canton Network and using them to purchase a tokenized gilt from Archax. Lloyds said the transaction demonstrated how tokenized deposits and tokenized securities could be used together for settlement.
The transaction was a specific demonstration rather than evidence that tokenized assets have already replaced conventional financial-market infrastructure.
UK Institutions Increase Technology Investment
The survey’s tokenization findings come alongside broader technology-investment plans among UK financial institutions.
The 77% figure for emerging-technology investment was already reported by Lloyds in June 2026 as part of the same annual survey. At the time, Lloyds also reported that 93% of respondents expected AI and machine learning to have the biggest impact on UK financial services over the next five years.
The October update places tokenization within that broader technology-investment picture, with respondents identifying payments, settlement, collateral and liquidity management as areas where blockchain-based infrastructure could potentially be used.
UK Pushes Tokenization Initiatives
Lloyds’ findings come as UK regulators and financial institutions continue developing tokenization-related initiatives. The Bank of England and Financial Conduct Authority are accelerating work on a joint tokenization framework. In addition, a 54-firm UK tokenization taskforce involving firms including BlackRock, JPMorgan, Ripple, and Coinbase has been formed to advance tokenization initiatives.
These developments provide additional context for Lloyds’ survey, but they do not independently establish that tokenization will reshape financial services.
Survey Shows Intent, Not Adoption
The Lloyds figures measure institutional expectations and investment intentions rather than the current level of tokenization adoption. The 71% figure indicates that respondents expect tokenization to have a significant effect on financial services, but it does not measure how much tokenized infrastructure respondents have deployed or how much transaction volume currently runs on blockchain-based systems.
The survey was also commissioned and published by Lloyds, which is itself developing tokenization-related products and infrastructure. Its January transaction with Archax and the Canton Network demonstrates Lloyds’ participation in the market, but also means the bank has a direct commercial interest in the development of tokenization.
The findings should therefore be read as a survey of institutional sentiment and intentions, rather than an independent measurement of industry-wide adoption.
Why It Matters
The Lloyds survey provides a snapshot of how senior decision-makers at major UK financial institutions currently view tokenization. With 71% expecting it to reshape financial services and 60% identifying faster payments and settlement as its biggest potential opportunity, the responses indicate particular institutional interest in financial-market infrastructure.
Whether those expectations translate into scaled production systems, increased transaction volumes and wider adoption remains to be determined.
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