Lack of upskilling and regulatory preparedness is holding back GenAI adoption within UK FS firms

• Majority (91%) of UK firms surveyed have adopted AI into operations to some degree, but most remain in the early stages and 5% have not integrated AI at all
• 82% of leaders plan to increase annual investment related to GenAI specifically 
• Only 9% of leaders say their firm is prepared for incoming regulation and 14% do not have an AI regulatory risk framework in place
• Just 27% of firms have established GenAI training programmes, despite the majority (77%) of leaders believing their workforce does not have strong capabilities to implement GenAI applications

Leaders across the UK’s financial services sector continue to integrate Artificial Intelligence (AI) and Generative AI (GenAI) technologies into their operations to achieve productivity and efficiency uplifts, according to the second EY European Financial Services AI Survey, but only 5% rank themselves ahead of the curve. Whilst leaders’ aspirations for a more AI-enabled business are high and 32% say they have accelerated overall AI adoption over the last year, most firms remain in the early, experimental stages, especially when it comes to GenAI.

The new survey data, which canvassed the views of UK financial services executives at 20 UK firms representing an aggregate market cap of almost £200bn, finds that only 32% of firms across UK believe they are on track with overall AI integration. Just 9% of executives say their firm is prepared for incoming AI regulation, and despite 77% acknowledging their workforce has only some, limited or no experience of the newest GenAI-related technologies only 27% of firms have established new training and upskilling programmes, with 63% still in the planning phase.

Anna Anthony, EY UK Financial Services Managing Partner, comments: “GenAI 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. 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. 

“GenAI is, without doubt, developing faster than other technological innovations of recent times, and requires new, specialist skill sets. 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.”

AI could impact a quarter of UK’s finance roles next year – especially at entry-level

The majority (59%) of UK executives surveyed believe that over the next year a quarter (25%) of current UK financial services roles could be impacted by ongoing AI integration, and 95% of UK executives say up to 10% of roles could become redundant. Despite this, only 27% report their firm has an established training programme in place, 36% say plans are still in their infancy, with the same number (36%) confirming they currently have no training programmes in place – 9% of whom say they have no plans to develop one.

Entry level positions are expected to be particularly impacted, with 59% 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% of UK executives are planning to restructure entry-level roles and responsibilities, and just 18% plan to integrate AI training within their graduate program. Forty-one per cent say they have not taken any action to offset any potential knock-on impacts of AI adoption to the junior workforce.

Business areas demanding AI expertise and attributes leaders look for in new hires

The business area that has the highest demand for AI talent is data science and innovation (the top choice for 64% of UK respondents). The second ranking business area is front office operations (50%) with the third being back-office operations (45% of UK respondents), followed by information technology (41% of respondents in 2024).

When asked to consider the top attributes that firms will seek as they recruit entry level talent for an AI-enabled workforce, the top three cited by UK financial services leaders were having an innovative and experimental mindset (82%), the ability to adapt and flex (64%), and the ability to collaborate and work outside their focus area (50%). 

UK finance leaders plan to increase capital allocation to GenAI specifically 

The survey data confirms that GenAI driven investment is central to UK financial firms, with 82% of executives planning to increase expenditure over the next six to 12 months. 

GenAI knowledge, future regulation, and keeping pace are leaders’ top concerns

Focusing on GenAI specifically, the two biggest concerns cited by UK executives when it comes to integrating the technology are uncertainty about existing and pending potential regulatory impacts (59%) and limited understanding and experience of GenAI applications and the impact across the workforce (50%). The speed of AI evolution relative to speed of integration within the business is the third ranked concern cited by 32% of respondents. 

In reference to the broader AI landscape, only 9% of leaders stated that their firm is fully prepared for incoming regulation, while 68% say their firm is only limited or partially prepared, and 14% do not even have an AI regulatory risk framework in place.

Ethics in GenAI integration

On GenAI specifically, leaders continue to raise concerns about ethics. The top concern in 2024 for GenAI adoption is transparency and explainability (cited by 68% of all UK respondents), followed by privacy (55%) and the quality of output (41%). The joint fourth concerns are the potential for discrimination, bias, and lack of fairness (36%) and accountability (36%). To manage potential ethical implications arising from GenAI integration, 14% of respondents claimed they have already put an overall AI ethics framework in place, with a further 45% in the early stages of development. However, just under a quarter (23%) of respondents stated their firm is yet to develop an AI ethics framework, and 18% said they have no plans to develop one. 

Preetham Peddanagari, EY UK Financial Services Technology Consulting Leader, comments: “GenAI technologies are set to transform the UK financial services industry, across both the front and back-office. While there are a small number of firms that are in the advanced stages of embedding GenAI capabilities, there are 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 GenAI 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.”

Notes to Editors

About the EY 2024 Financial Services AI Survey 

The EY UK Financial Services AI Survey sought the views of financial services executives across 20 UK private and listed firms, representing an aggregate market cap of almost £200bn across the UK in October 2024. The survey was conducted to assess the potential impacts of AI and Gen AI integration on productivity, talent, skills, capital allocation, and risk management.

The wider EY European Financial Services AI Survey canvassed the views of financial services executives at 106 private and listed firms, representing an aggregate market cap of almost €880bn across Europe in October 2024.