The bank will use Actimize's new Employee Fraud prevention software to detect fraud from within the company.

Actimize says the product gives banks the analytic infrastructure and tools to monitor transactions and automate fraud detection.

The system examines multiple data sources across the enterprise and mines data for suspicious patterns, says Actimize, and the application's analytics - such as fraud correlation - can detect complex fraud scenarios including employee collaboration with other internal and external parties.

Commenting on the implementation, Bob Spencer, head of group financial crime, Lloyds TSB, says: "We pride ourselves on our ability to protect our customers from all types of threats, no matter where they come from. The Actimize Employee Fraud solution reinforces the bank's investment in securing both customer and bank assets."

Actimize says Lloyds TSB is the first UK retail bank to install its Employee Fraud package.

Last year the Financial Services Authority (FSA) warned that "insider fraud" - through collusion, coercion, infiltration or existing employee action - was one of the most serious fraud threats faced by banks. The watchdog has also repeatedly warned the industry that organised gangs of criminals are infiltrating British banks in order to carry out large-scale frauds.

Furthermore earlier this year Steve Wilmott, head of the economic crime department at City of London police, told reporters that over 30% of his unit's work now involved "some insider element", compared with around 10% eight or nine years ago.

Wilmott said that retail banks are at greater risk of "insider fraud" than investment banks.