UK’s AI push puts wealth managers on notice, research reveals
By Puja Sharma
The UK government’s newly announced AI Opportunities Action Plan marks a significant milestone in the country’s ambition to become a global leader in artificial intelligence. Accompanied by a £14 billion investment from private lending technology firms, the plan signals a robust commitment to fostering AI innovation across sectors. While the initiative primarily focuses on driving AI adoption within the public sector, its ripple effects are expected to influence industries far beyond, particularly financial services and wealth management.
The UK’s wealth management industry, already navigating rapid digital transformation, stands at a pivotal point. Artificial intelligence has evolved from a niche technology into a strategic necessity for firms aiming to enhance efficiency, client experience, and regulatory compliance. Wealth managers are now under increasing pressure to integrate AI-driven solutions to remain competitive and meet the growing expectations of tech-savvy clients.
Commenting on the implications of this development, Suman Rao, Managing Director for the UK and Ireland at Avaloq, emphasised that the government’s action plan is a clear signal that it’s time for wealth managers to prioritise AI adoption. “AI has moved from an exciting yet nascent technology to something that all wealth managers must have a plan for. Today’s announcement reinforces the UK’s intent to lead in AI innovation. While the focus is on the public sector, financial services firms must seize this opportunity to drive future innovation,” Rao stated.
Avaloq’s 2024 research supports this perspective, revealing that 87% of UK wealth managers view AI as integral to their future operations. Key areas where AI is expected to make an impact include automating client onboarding processes, generating meeting summaries, and improving regulatory compliance checks. These functions, traditionally time-consuming, can be streamlined through AI, freeing up wealth managers to focus on personalised client engagement and strategic decision-making.
Despite the optimism, challenges remain. Rao cautioned that wealth managers who have yet to explore AI integration need to assess both the risks and opportunities thoroughly. “For firms still on the sidelines, the priority should be understanding how AI aligns with their business models while navigating the associated risks. Our research also shows that UK investors prefer AI to work alongside human advisors rather than replacing them, highlighting the continued importance of human expertise,” Rao explained.
This insight reflects a broader industry sentiment. While AI promises operational efficiency and data-driven insights, it cannot fully replicate the trust and personalised advice that human wealth managers provide. This hybrid model—leveraging AI for analytics and automation while preserving the human touch—may become the industry standard.
Moreover, with global data privacy regulations tightening, wealth managers must also balance innovation with compliance. The UK’s evolving regulatory landscape adds complexity to AI adoption, requiring firms to implement robust data governance and security frameworks. Rao emphasised that achieving this balance is critical for firms aiming to scale their AI capabilities responsibly.
The AI Opportunities Action Plan not only accelerates technological advancement but also intensifies the competitive landscape for wealth managers. Firms that can swiftly adapt and strategically implement AI will likely emerge as industry leaders, while slower adopters risk falling behind. Rao concluded, “With the pace of AI change only accelerating, wealth managers must define the right mix of human insight and machine intelligence to secure long-term success.”
As the UK strengthens its position in the global AI race, the wealth management sector faces a defining moment. Proactive adoption of AI, balanced with regulatory compliance and human expertise, will be key to unlocking new growth opportunities and delivering exceptional client experiences.
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