UK banks are increasingly adopting AI to combat fraud, improve services, and automate processes. AI systems are being implemented for real-time fraud detection, particularly against Authorised Push Payment (APP) scams, which cost UK consumers £460 million in 2023. Mastercard has expanded its AI-powered insights to provide banks with greater visibility into potentially fraudulent transactions. The technology scans numerous data points to provide a risk score, enabling banks to stop scams before funds are transferred.
Beyond fraud prevention, AI is being used to automate lending checks and deliver personalised financial offerings. Conversational AI and agentic AI are deployed by UK banks to handle customer queries and collaborate with agents. AI is also being tested in 'supercharged sandbox' environments to detect stock market manipulation. The FCA is working with firms to test AI in a safe environment to understand the potential benefits and risks. Areas with the largest expected increase in benefits over the next three years are operational efficiency, productivity, and cost base.
These changes reflect a broader trend, with 75% of UK financial firms already using AI and another 10% planning to adopt it within three years. This adoption is driven by the need for greater efficiency, regulatory pressures, and rising customer expectations for seamless and secure services.
