UK finance SMEs accelerate AI and digital adoption, study finds

By Aarav Garg

A report by Future Finance said that 95% of participants in its Innovation Leadership Programme are now adopting new innovations, highlighting growing momentum for change across UK financial services.

The findings were published in the programme’s latest impact report, covering work since autumn 2023 with SMEs and mid-tier financial services firms. Those organisations form a large share of the UK sector but often face tighter budgets, legacy processes and slower transformation cycles than larger banks.

According to the report, measurable gains have already emerged from participating firms. One business reported saving more than 100 staff hours through AI adoption. Cambrian Credit Union recorded a 35% reduction in loan processing times, while community lender Moneyline reported 14% fewer customers falling into legal arrears.

Future Finance said the strongest barriers to innovation were not technical, but organisational. Regulatory complexity, leadership caution and uncertainty around fast-moving technologies were cited as key reasons many firms delayed adoption.

That finding reflects a broader trend in financial services, where technology budgets have risen but implementation remains uneven. Smaller firms often struggle less with access to tools than with governance, internal capability and confidence to deploy them.

The accelerator was designed around that gap. Through its Innovation Leadership Programme, Innovation Adoption Consultancy and Collaborative Challenge Programme, the initiative focused on helping executives assess opportunities, manage risk and make deployment decisions rather than prescribing specific technologies.

The programme said it also hosted thought-leadership events attended by 1,400 people across the UK, signalling wider industry interest in practical transformation models.

Future Finance has since been referenced in three UK government strategies: the Professional and Business Services Sector Plan, the Digital and Technologies Sector Plan, and the National Financial Inclusion Strategy.

Jack Stanbury, Project Lead, said, “We were working with credit unions on digital transformation, helping firms build AI capability, and designing for financial inclusion long before any of these strategies were published. The fact that government policy has landed in the same place tells you everything about the need for this work and its value.”

The next phase will focus on commercialising and expanding the model to more firms, with potential extension into adjacent sectors such as professional services, as policymakers seek broader productivity gains from innovation spending.