More than half (51 per cent) of financial institutions plan to increase their investment in artificial intelligence (AI) over the next 12 months, as attitudes towards the technology shift amid improved productivity, research from Lloyds Banking Group has found.

Its Financial Institutions Sentiment Survey (FISS), which asked banks, asset and wealth managers, insurers, and financial sponsors about their experiences and expectations of AI, indicated that the sector was entering a new phase of maturity.

Respondents reported tangible business benefits and increased investment in the technology over the past 12 months.

More than half (59 per cent) now said they had seen improved productivity from AI, up from 32 per cent in 2024.

A third (33 per cent) felt it was enhancing client experience, up from 14 per cent last year, while the same percentage said they were gaining deeper customer insights, compared to 18 per cent in 2024.

Furthermore, the proportion stating that AI was directly driving business growth had risen from 8 per cent in 2024 to 21 per cent this year.

This progress was fuelling a shift in attitudes, with 91 per cent of institutions now seeing AI as more of an opportunity than a threat, up from 80 per cent in 2024.

Over half (51 per cent) were planning to increase AI investment over the next 12 months, while a further 22 per cent planned to maintain their current levels of spending.

Looking ahead, 54 per cent of respondents expected AI to deliver competitive advantages, 53 per cent anticipated cost savings, 52 per cent believed it would help drive business growth, and 50 per cent said it would support the building of a more technologically skilled workforce.

Almost half (48 per cent) of financial institutions have already set up dedicated AI teams, while 20 per cent have partnered with external AI providers to hasten adoption.

“This year’s FISS findings show that UK financial institutions are not only investing in AI, they’re building it into the fabric of their businesses and seeing measurable gains,” commented Lloyds Bank Corporate & Institutional Banking head of institutional coverage, Lisa Francis.

“The productivity uplift alone is a compelling sign that these technologies are already reshaping the industry. We remain focused on supporting financial institutions to embed the technology in a way that drives measurable outcomes.”

Lloyds Banking Group director of AI and advanced analytics, Rohit Dhawan, added: “We’re seeing AI move firmly into the execution phase. Institutions are building on early investments and delivering tangible outcomes, such as productivity gains and sharper customer insights.

“At Lloyds, we now have over 800 models in operation, representing more than 200 AI use cases, designed to enhance colleague and customer experience, and we believe that, with the right focus, the UK has an opportunity to lead in responsible AI adoption across financial services.”

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