Banks set to accelerate AI investment as productivity surges

September 4, 2025 • FinTech News
Banks set to accelerate AI investment as productivity surges

UK financial institutions are significantly increasing their artificial intelligence investments, according to new data from Lloyds’ Financial Institutions Sentiment Survey. The annual survey gathered insights from more than 100 senior leaders across major banks, asset managers, wealth firms, and insurers. Results indicate the sector is entering a new phase of AI maturity with clear business benefits.

Productivity Gains Driving Further Investment

The survey reveals that 59% of institutions have already achieved productivity improvements through AI adoption. This represents a substantial increase compared to previous years. Beyond efficiency gains, AI is enhancing client experience, customer insights, and overall business growth. These positive outcomes are giving financial services firms greater confidence to allocate additional resources to AI initiatives.

Strategic Approaches to AI Implementation

In response to these benefits, over half (51%) of surveyed institutions plan to increase AI investment within the next year. Another 22% expect to maintain their current spending levels. To accelerate their AI capabilities, nearly half (48%) of firms have established dedicated in-house AI teams. Meanwhile, 20% have chosen strategic partnerships with external AI providers instead.

Lloyds as a Case Study in AI Adoption

Lisa Francis, head of institutional coverage at Lloyds Bank Corporate & Institutional Banking, emphasized this industry shift. She noted that UK financial institutions are integrating AI into their business foundations and seeing measurable results. Lloyds itself has emerged as an adoption leader, having developed a new machine learning and GenAI platform with Google Cloud’s Vertex AI. This platform is projected to generate at least £50 million in revenue growth and productivity improvements by 2025.

According to Rohit Dhawan, director of AI and advanced analytics at Lloyds Banking Group, the institution already operates more than 800 AI models across 200 use cases. He observed that AI is moving firmly into the execution phase, with institutions building on early investments to deliver tangible outcomes. The survey ultimately underscores that financial institutions are no longer experimenting with AI but embedding it as a critical driver of future competitiveness.