Despite the rapid rise of artificial intelligence (AI) and generative AI technologies across the UK’s financial services sector, most firms remain in the early, experimental stages, according to new study data from professional services network EY.
In its second ‘European Financial Services AI Survey‘, EY reveals that only five per cent of finance leaders rank themselves ahead of the curve regarding AI. Whilst leaders’ aspirations for a more AI-enabled business are high and 32 per cent say they have accelerated overall AI adoption over the last year, most firms are encountering major challenges in making their aspirations a reality.
The new survey data, which canvassed the views of UK financial services executives at 20 UK firms representing an aggregate market cap of almost £200billion, reveals that only nine per cent of executives believe their firm is prepared for incoming AI regulation.
Despite 77 per cent acknowledging their workforce has only some, limited or no experience of the newest generative AI-related technologies only 27 per cent of firms have established new training and upskilling programmes, with 63 per cent still in the planning phase.
Anna Anthony, UK financial services managing partner at EY
“Generative AI is considered a top priority among UK financial services executives, who recognise the importance of harnessing such a game-changing technology for the productivity and efficiency gains it can bring. However, there are a number of challenges when it comes to fully embedding a fast-evolving technology into operations and across workforces,” explained Anna Anthony, UK financial services managing partner at EY. “Whilst some firms have made huge strides in adopting AI and have seen material benefits, many are struggling to keep pace and have considerable work to do to get up to speed with regulatory standards.
“For firms to remain competitive it will be essential that they develop and roll out new training and upskilling programmes and put in place appropriate risk and regulatory control frameworks.”
How is AI changing the landscape?
Fifty-nine per cent of UK executives surveyed believe that over the next year, 25 per cent of current UK financial services roles could be impacted by ongoing AI integration, and 95 per cent of UK executives say up to 10 per cent of roles could become redundant.
However, only 27 per cent report their firm has an established training programme in place, 36 per cent say plans are still in their infancy, with the same number confirming they currently have no training programmes in place – nine per cent of whom say they have no plans to develop one.
Entry-level positions are expected to be particularly impacted, with 59 per cent of UK leaders believing AI technologies will have a significant or even transformative impact on the roles and tasks undertaken by those joining the workforce. Despite this, only 14 per cent of UK executives are planning to restructure entry-level roles and responsibilities, and just 18 per cent plan to integrate AI training within their graduate programme.
Preetham Peddanagari, UK financial services technology consulting leader at EY, commented: “While there are a small number of firms that are in the advanced stages of embedding GenAI capabilities, there is a much greater number that are still in the experimental phase despite investment, and much of what has been developed to date has been focused solely on back-office processes.
“Many banks, asset managers and insurers across the UK sit behind the curve, not only when it comes to generative AI integration but also regulatory readiness. It is now vital for firms to accelerate their plans on both fronts and ensure new and current staff are equipped with the right AI skills to help drive deeper adoption.”
AI investment
The survey data confirms that generative AI-driven investment is central to UK financial firms, with 82 per cent of executives planning to increase expenditure over the next six to 12 months.
Focusing on generative AI specifically, the biggest concerns cited by UK executives when it comes to integrating the technology are:
uncertainty about existing and pending potential regulatory impacts (59 per cent)
limited understanding and experience of generative AI applications (50 per cent)
the speed of AI evolution relative to the speed of integration within the business (32 per cent)
Overall, 68 per cent say their firm is only limited or partially prepared for AI adoption, while 14 per cent do not even have an AI regulatory risk framework in place.
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