Lloyds Banking Group has expanded its partnership with Microsoft to scale agentic AI across the organisation and deliver more personalised services to its 28 million customers.

The bank has signed a new multi-year agreement that will see it deploy Microsoft's Microsoft 365 E7 "AI Frontier Suite" across the business.

Microsoft said Lloyds is one of the first UK banks to roll out the platform across the whole company.

The suite combines Microsoft 365 E5, Microsoft 365 Copilot and Agent 365, alongside security, identity and governance tools. Lloyds said it plans to use the technology to support the next phase of its AI strategy, moving beyond productivity gains towards agentic AI systems that can complete tasks and support business processes more autonomously.

The move builds on Lloyds' existing AI programme. The bank has already rolled out 40,000 Microsoft 365 Copilot licences.

Some 97 per cent of licensed employees actively use the tool and Lloyds added that the technology has helped staff respond to customer queries more quickly and spend more time on higher-value activities.

Under the new agreement, Lloyds said it plans to introduce a bank-wide colleague assistant. The assistant will act as a self-service AI agent, helping employees access systems, information and answers through a single interface.

The bank also intends to develop additional AI agents focused on specific customer and employee journeys. It will manage these through Microsoft's Agent 365 platform, which provides orchestration and governance capabilities for agentic AI deployments.

Alongside the expansion of Microsoft 365, Lloyds Banking Group will increase its use of GitHub Copilot. The bank has already deployed the coding assistant to more than 10,000 engineers.

Ron van Kemenade, group chief operations officer at Lloyds Banking Group, said the move will help the bank to provide better experiences for its customers.

"We're embedding agentic AI across Lloyds Banking Group to make banking simpler, faster and more personalised for customers,” he added. "It means quicker answers and more intuitive services, while helping our colleagues spend more time on the things that matter most."

Last month Lloyds launched an internal platform designed to responsibly grow the adoption of AI agents across its operations.

The platform, called Envoy, gives teams across the Group a standardised way to build, deploy and manage AI agents, with built-in governance, monitoring and risk controls. Lloyds said the technology will help improve both customer journeys and internal productivity, while maintaining oversight and accountability.

Built on Google Cloud, Envoy provides pre-configured templates that allow teams to develop AI tools without starting from scratch. The bank said this approach will reduce duplication, encourage reuse, and support a more consistent deployment of AI across business units.

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