Lloyds survey: UK financial firms boost AI spending

Lloyds found that 64% of UK financial institutions plan to increase capital expenditure year on year. Its annual survey also showed that 77% now view investment in new and emerging technology as a growth priority.

The findings point to a marked shift in how senior executives across the sector are approaching technology budgets. Rather than limiting spending to pilot projects, respondents indicated that investment is moving into broader deployment across business operations.

More than 100 senior decision-makers took part in the survey, spanning banks, insurers, private equity firms, and asset and wealth managers. The research suggests technology spending is becoming more closely tied to long-term strategy, with infrastructure, productivity, and operational resilience among the main areas attracting funding.

AI and data are central to that shift. The survey found that 93% of respondents believe artificial intelligence and machine learning will have the biggest impact on UK financial services over the next five years, while 91% expect investment in AI at their own organisation to rise over the next 12 months.

The change is sharper than in earlier responses. A year ago, 41% of respondents said investment in new and emerging technologies was a growth priority, and that figure stood at 25% in 2024. The latest reading of 77% suggests technology has moved much higher up the agenda in a relatively short time.

Growth outlook

The survey also showed stronger confidence in the sector's broader business prospects. Some 94% of respondents expect their business to grow over the next decade, up from 81% in the previous survey.

Short-term expectations also improved. The proportion forecasting growth over five years rose to 92% from 83%, while the share expecting growth over the next 12 months increased to 67% from 54%.

This pattern suggests firms are looking beyond immediate market pressures and remain prepared to commit capital to multi-year projects. Spending is being framed not only as a route to expansion, but also as a way to improve core systems and client service.

Confidence in the UK's position as a global financial centre also strengthened. The survey found that 71% of respondents believe the UK will retain its standing as a leading global financial services hub, compared with 60% a year earlier.

According to the findings, that view reflects continued support for the UK's financial markets, regulatory framework, and international links. It also suggests many institutions still see the domestic market as a viable base for further investment, even amid wider economic and geopolitical uncertainty.

Technology focus

The results come as financial firms face pressure to modernise systems, use data more effectively, and find new efficiencies. For many institutions, AI has become part of that push, with spending increasingly linked to production use rather than experimentation.

Capital expenditure plans offer one of the clearest signs of that shift. Higher capex budgets usually signal a commitment to longer-term projects, especially in sectors where replacing or upgrading infrastructure can take years and involve high cost.

Lisa Francis, Global Head of CIB Coverage at Lloyds, said the survey reflects the sector's focus on long-term competitiveness.

"Despite global uncertainty, financial institutions are building confidence by harnessing technology to drive long-term growth. The sector is prioritising the areas that will define future competitiveness, from AI and emerging technology to data, talent and international expansion. What is clear is that growth in the next decade will be shaped by the ability to adapt, invest and scale new capabilities. Advanced AI and data solutions are moving from ambition to adoption, with institutions increasingly looking at how these technologies can improve productivity, deepen client relationships and create new opportunities across markets," said Lisa Francis, Global Head of CIB Coverage at Lloyds.