Viren Patel, Financial Services Industry Strategist, Workday
The financial services sector in the UK is considerably more productive than the majority of the economy in which it exists. If we look at the UK economy as a whole, there is a significant gap between current levels of productivity and where those levels should be. The financial services industry in the UK presents a stark contrast to this status quo.
In fact, financial services here are nearly 2.5 times more productive than the economy on average. Put differently, in 2023, the industry contributed a considerable £243.7 billion to the UK economy, which represents approximately £12 of every £100 of economic value generated.
It’s clear that financial services in the UK are faring better than most industries. But how does the sector compare to its counterparts on the continent? Again and perhaps surprisingly, financial services in the UK are outperforming comparative markets. In 2023, the number of financial services foreign direct investment projects across Europe climbed to 329. The UK recorded 108 of those projects, an increase of 42% from 2022. This is a drastic difference from second-place France, with 39 projects.
Financial services is a bright spot in the UK economy which, on the whole, is much more mixed. Brexit, inflation, the pandemic and geopolitical conflict have all harmed the UK’s productivity levels. While many of these issues have hit other markets, the UK has been particularly impacted as evidenced by how productive it is compared to other parts of Europe – markets like France and Germany are ahead by 13% – 28%.
Ultimately, this makes the financial services sector’s success in the UK even more important. It fuels not just individual businesses but the broader national economy. And so it’s vital that the sector cements the advantages it has built.
To do that, it is essential that the sector future-proof itself and adopt new technologies like AI from the ground up – for risk financial services in competing global markets closing the gap.
AI is key to the future of financial services
What are people at the front line of the industry saying? According to recent Workday research, financial services businesses are significantly more likely to report success than those in other sectors – like healthcare, for example. In fact, 81% of financial services employees say that their company’s growth met or exceeded targets, higher than all other industries surveyed.
Positively, employees and leaders at financial services organisations in the UK are also aware of the productivity boost that AI presents them – suggesting they are primed to seize such benefits. Financial services respondents predict they could save an average of 2.7 hours each day if AI was implemented effectively. For a sector that already prides itself on productivity, these are significant potential gains that could free up vast amounts of employee resources.
The ways in which AI can help the financial services sector are quite exhaustive. With an ability to analyse vast data sets at scale, AI systems are well-tuned for fraud detection and prevention as well as algorithmic trading. Because enterprise grade AI systems can also safely analyse protected customer data, it can also help financial services teams and their enterprises provide personalised financial solutions and insights.
During day-to-day work, AI can also empower financial services professionals to automate processes like year-end reporting, boost regulatory compliance and help make informed decisions when it comes to credit scoring and lending.
Given these widespread applications that improve both internal processes and end-customer experiences, AI is clearly the next frontier for financial services companies looking to hone their competitive edge.
To stay ahead, bring AI into the fold
The financial services sector in the UK is strong and has set the standard for what a high-productivity sector can look like as others struggle. Its growth is a beacon for both other industries, and the economy as a whole. But this is not a reason to slow down.
The potential benefits AI can offer financial services are powerful. It can supercharge employees with rapid access to crucial insights, automate routine tasks and analyse vast data sets in real time.
It’s time now to embrace this new technology, ensuring the sector’s leadership continues by forwarding a more streamlined and efficient way of working.
