UK Financial Institutions Double Investment in AI Over the Past 12 Months
By Lauren Hinton · 2 October 2024
The number of UK financial institutions investing in artificial intelligence (AI) has doubled within a year, according to Lloyds Bank’s ninth annual Financial Institutions Sentiment Survey. Almost two-thirds (63%) of respondents are investing in the emerging technology, up from one third (32%) in 2023.
The survey, which gathered insights from over 100 senior decision-makers at banks, wealth and asset managers, insurers, and financial sponsors, highlighted the importance of AI with 81% of financial institutions stating they view it as a business opportunity, a significant rise from 56% in 2023.
The report shows that nearly half (46%) of financial institutions have established dedicated teams to explore AI use cases, while two-fifths (39%) have partnered with firms possessing AI capabilities. Additionally, 15% have already collaborated with firms specialising in AI.
When examining the opportunities AI provides financial institutions and whether benefits are already being felt, three key areas emerged from the survey. These were:
- Improved productivity: 62% see it as an opportunity while 32% are already seeing the benefit
- Competitive advantage: 61% see it as an opportunity while 22% are already seeing the benefit
- Greater insight on customers: 69% see it as an opportunity while 18% are already seeing the benefit
For other priorities, such as driving business growth and enhancing client experience, many respondents have yet to see significant benefits. However, over two-thirds (69%) of institutions expressed confidence in their ability to implement AI and capitalise on its potential.
Lisa Francis, Head of Institutional Coverage, Lloyds Bank Corporate & Institutional Banking, said: “This year's survey highlights a significant boost in AI investment among UK financial institutions, reflecting its elevation to a board-level priority. The focus has shifted from merely exploring AI to making practical investments and applications. As a result, many institutions are already experiencing the benefits, such as enhanced productivity, deeper customer insights, and a stronger competitive edge. While the full impact across all business areas is yet to be realised, this will evolve as institutions continue to innovate, test and learn.”
Rohit Dhawan, Director of AI and Advanced Analytics at Lloyds Banking Group, said: "Artificial intelligence is rapidly reshaping the financial landscape, and what we’re seeing is just the beginning. Growing investments from financial institutions and increasing partnerships in AI demonstrate a clear commitment to leveraging this technology. From automating complex processes to unlocking insights that improve decision-making, AI is enabling institutions to reimagine what’s possible. We are witnessing an exciting period of transformation, and it’s inspiring to consider the advancements that lie ahead for the sector." Companies in this story: Lloyds Banking Group
People in this story: Lisa Francis, Rohit Dhawan