A survey conducted by the Bank of England (BoE) and the Financial Conduct Authority (FCA) has found that 75% of financial firms in the United Kingdom are already utilising artificial intelligence (AI) in their operations. This marks a significant increase from the 58% reported in the previous survey conducted in 2022.
The survey, which gathered responses from 118 firms across key financial sectors, including UK banks, international banks, insurers, and non-bank lenders, also revealed that an additional 10% of firms plan to implement AI within the next three years.
The adoption of AI is particularly prevalent in the insurance sector, where an impressive 95% of firms are already leveraging the technology. International banks operating in the UK follow closely behind at 94%.
Joseph Twigg, CEO of Edinburgh-based AI Fintech Aveni.ai, commented on the survey results: “The financial services industry does not need AI models that can quote Shakespeare, it needs AI models that deliver transparency, trust and above all correctness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, reviewed by financial services experts for specific financial services use cases.”
The survey highlighted several key benefits of AI adoption in the financial sector. The highest perceived current benefits are in data and analytical insights, anti-money laundering (AML) efforts, fraud prevention, and cybersecurity.
However, the rapid adoption of AI also brings potential risks. The survey found that four of the top five perceived current risks are related to data, including data privacy and protection, data quality, data security, and data bias.
Interestingly, the survey revealed a significant increase in reliance on third-party providers for AI systems. Currently, 33% of all AI use cases are third-party implementations, up from 17% in the 2022 survey.
Robin Scher, Head of Fintech Investments at Lloyds Banking Group, emphasised the potential of AI in the sector: “Aveni’s cutting-edge AI solutions offer a huge opportunity for the financial services industry, streamlining operations and elevating the customer experience.”
As AI continues to revolutionise the financial services landscape, the survey predicts that the number of AI use cases is expected to more than double in the next three years, rising from a median of nine currently to 21.
