AI adoption in UK finance reaches 86%, study shows

By Divya Shah

Why it matters: The study confirms that AI has entered the mainstream of financial services, with adoption extending from banks and insurers to payments firms and investment managers. The rise of generative AI and AI agents is creating new opportunities for automation, efficiency and customer engagement, while also introducing fresh challenges around governance, operational resilience and regulatory oversight.

Key findings:

• AI adoption in financial services rose to 86% of surveyed firms, up from 75% in 2024
• Generative AI now accounts for 56% of reported AI systems, highlighting the rapid adoption of GenAI technologies across financial institutions
• 80% of firms have deployed AI agents, with a further 14% planning deployment within 12 months

Artificial intelligence has moved from experimental projects to mainstream deployment across the UK financial sector, with banks, insurers, payments firms and investment managers rapidly increasing their use of AI and generative AI technologies, according to a new joint survey by the Bank of England and the Financial Conduct Authority (FCA). 

The latest research, Artificial intelligence in UK financial services – 2026, found that 86% of financial services firms now use AI, up from 75% in 2024 and 58% in 2022, highlighting the accelerating adoption of AI across the industry. 

 The research, which gathered responses from 196 firms across banking, insurance, payments, lending and capital markets, indicates that AI is increasingly becoming a core part of business operations rather than a standalone innovation initiative. 

 A shift is also underway in the type of AI technologies being deployed. Generative AI now accounts for 56% of reported AI systems, marking a substantial increase from the early adoption of foundation models reported in previous surveys. Financial institutions are using these technologies across multiple functions, with Operations and IT emerging as the largest area of deployment, accounting for around 31% of reported AI systems. Risk, compliance, customer operations and enterprise productivity are also seeing increased adoption.  

One of the research’s most notable findings is the rapid emergence of AI agents within financial services environments. According to the survey, 80% of respondents have already deployed AI agents, while a further 14% expect to introduce them within the next 12 months. However, most organisations continue to maintain human oversight, with AI agents primarily providing decision-support recommendations rather than operating autonomously. Only a small proportion of firms reported deploying highly autonomous agents capable of making and executing decisions independently.  

The growing use of AI is being driven largely by expectations around efficiency and productivity. Respondents identified operational efficiency, automation and productivity improvements as the most immediate benefits generated by AI deployments. Looking ahead, firms expect AI to play a larger role in strengthening cybersecurity, operational resilience and revenue generation over the next three years. 

At the same time, the research highlights a number of challenges that continue to accompany increased AI adoption. Data protection and security risks were identified as the leading concerns, followed by third-party and supply-chain dependencies, as well as risks specific to generative AI technologies, including hallucinations, prompt manipulation and data leakage. Financial institutions also expressed concern about the increasing concentration of AI services among a small group of cloud and technology providers.  

Third-party AI systems are becoming increasingly important within financial services technology stacks. The survey found that externally sourced AI solutions now account for 39% of reported AI systems and more than half of those considered high materiality. This trend underscores the growing reliance on FinTech vendors, cloud service providers and specialist AI platforms to deliver critical financial services capabilities. 

 Governance remains another key area of focus. Most firms reported having formal AI policies and governance frameworks in place, with 94% adopting organisation-wide AI standards and 84% maintaining centralised AI governance forums. Despite these efforts, survey participants cited oversight of third-party AI systems as one of the most significant implementation challenges. 

The research also points to a widening role for AI among smaller financial institutions. Nearly three-quarters of smaller firms reported using AI, with large language models emerging as the most widely adopted technology. Operations, customer service and compliance functions are among the most common deployment areas, suggesting that AI-powered tools are becoming increasingly accessible beyond large banks and insurers. 

For regulators, the findings reinforce the need to balance innovation with resilience and consumer protection. As AI systems become more deeply embedded across payments, lending, wealth management, compliance and customer engagement, ensuring appropriate governance and oversight will become increasingly important. 

 The research suggests that AI is no longer viewed as a future technology within financial services. Instead, it is becoming a foundational capability that is reshaping how institutions operate, manage risk and serve customers. While challenges around governance, cybersecurity and third-party concentration remain, the momentum behind AI adoption indicates that the technology will play a growing role in defining the future of financial services.