UK investment platforms are accelerating spending on technology advancements, with a focus on automation, data analytics, and artificial intelligence (AI), amid “huge optimism” for growth, according to The Platforms Association.

The trade association for the investment platform sector has published its inaugural Platform Horizons Report, in partnership with Alpha FMC, outlining the industry’s operational landscape, technological capabilities, and strategic priorities.

It highlighted that the tech investment forecast was set to grow at double the rate than that of operations.

‘Leading’ firms allocate almost twice as much of their IT budgets to innovation (61 per cent) compared to business-as-usual costs (32 per cent).

However, the association noted that firms that were ‘behind the curve’ were more burdened by legacy systems and day-to-day costs, which left less room for investment in technology.

Growth was found to be a key priority, but the report warned that firms with slower onboarding times risked added costs and weaker customer trust if they looked to scale their operations without addressing inefficiencies.

The report noted there was a 3 per cent rise in operational costs between 2023 and 2024, which it said reflected both strategic investment in scalability and a drive for greater long-term efficiency, even as growth is expected to slow this year.

Automation was the biggest strategic priority for most companies, followed by data and analytics, cyber security, and legacy system integration.

The Platforms Association noted that while AI was the ‘hot topic’ currently, it was underleveraged by the industry.

However, nearly nine in 10 firms said that AI was their number one priority over the next one to three years.

Looking at regulatory priorities, Consumer Duty topped the list as, unlike other regulatory requirements, it represented a fundamental shift in how platform businesses operate, according to the association.

Overall, the growing regulatory requirements mean most UK platforms allocate 16-30 per cent of change activities to regulations.

“Our inaugural Platform Horizons Report demonstrates the growing maturity and forward momentum of the UK platforms industry,” stated The Platforms Association CEO, Keith Phillips.

“What's particularly encouraging is seeing how our industry is proactively embracing transformation rather than simply reacting to challenges.

“The fact that 79 per cent of firms are prioritising automation and innovation, while simultaneously dedicating substantial resources to regulatory excellence through Consumer Duty implementation, shows an industry that is both operationally sophisticated and genuinely committed to delivering better outcomes for savers and investors.

“The emergence of leading firms who have achieved the 'zone of optimisation' - allocating 61 per cent of their IT budgets to strategic change rather than maintenance - provides a clear roadmap for the entire sector's evolution.

“This benchmarking study, the first of its kind for our industry, reinforces that UK investment platforms are not just keeping pace with global financial services innovation, but are actively setting the standard for how technology, operational excellence, and regulatory leadership can work together to build a more accessible and efficient investment ecosystem for millions of UK savers."

Alpha FMC senior partner and head of wealth management UK and Ireland, Scott Lee, added: “It’s clear that automation, AI, and regulatory change are reshaping platforms at pace. The level of transparency and collaboration in this benchmarking report will be critical in helping firms navigate complexity and deliver better outcomes for clients.

“As the industry’s transformation partner, Alpha FMC is committed to supporting platforms as they accelerate towards greater efficiency, resilience, and innovation.”

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