UK financial services AI adoption rises as generative tools gain share

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UK finance AI adoption rises

Highlights

AI adoption in UK financial services rose to 86% in 2026 from 75% in 2024, with generative AI now comprising 56% of AI systems.
Operations and IT account for 31% of reported AI systems, up from 22% in 2024, while high-materiality AI systems dropped to 7% from 16%.
Third-party AI systems rose to 39% of usage, with 40% of respondents citing information-security as a major adoption constraint and systemic risks expected to intensify.

Survey findings on adoption and deployment

As reported by the Bank of England, its fourth joint survey with the Financial Conduct Authority finds that 86% of respondents use artificial intelligence, up from 75% in 2024, with the technology mix shifting strongly toward generative AI.

Generative AI accounts for 56% of all reported AI systems, compared with 17% for foundation models in 2024. Use remains spread across business areas but is still concentrated in Operations and IT, which represent about 31% of all reported AI systems, up from around 22% in 2024, while no other single area accounts for more than 11%.

Most reported AI systems are not assessed by firms as high materiality, with around 7% classified that way, down from 16% in 2024. Even so, the absolute number of high-materiality AI systems in 2026 is greater than in 2024, and deployment remains uneven, with nearly half of firms reporting 10 or fewer systems while the top 10 respondents account for 43% of all reported AI systems.

AI agents are also widely deployed, with 80% of respondents saying they have adopted them and a further 14% planning deployments over the next 12 months. Most of those agents provide decision support rather than operating autonomously.

Governance pressures and sector implications

Third-party AI systems are becoming more prevalent and more material in UK financial services, accounting for 39% of all reported AI systems, up from 33% in 2024. Information-security concerns are cited by 40% of respondents as a major constraint on adopting third-party AI tools.

Firms rate operational efficiency, automation and productivity as the main benefits of AI, while data protection, security and risks linked to generative AI rank as the most significant perceived threats. Respondents also expect systemic risks to intensify as AI use expands across the sector.

Most firms report having formal AI governance arrangements in place, but oversight of third-party systems remains a significant challenge. The survey presents a picture of broader AI integration across UK finance while regulators and firms continue to weigh the operational gains against growing control, resilience and risk-management demands.

Our earlier article on the Bank of England’s push for bare metal recovery planning explained why UK banks are being urged to strengthen end-to-end cyber resilience as AI increases the scale and complexity of attacks. We noted regulators’ focus on independent fallback and recovery options for critical services, alongside tighter expectations for managing systemic risks as AI becomes more embedded in core operations.

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