The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

Jaywing’s new AI research study performed across twenty leading firms in the UK lending industry puts some hard numbers behind these discussions, and the findings are striking.

The current state

Our study of UK financial institutions reveals that 65 per cent of organisations have moved beyond discussion to active AI implementation. More importantly, firms are already seeing benefits both within and beyond their risk functions—indicating a genuine transformation in how they operate.

Three critical findings demand attention:

1. 36 per cent of organisations have no AI implementation in risk, currently. These firms face an increasingly urgent decision as the technology gap widens.
2. The largest barrier isn't technology—it's explainability, governance, and validation (40 per cent of respondents). This presents both a challenge and an opportunity for organisations to differentiate themselves through robust, explainable AI implementation.
3. Fewer than 10 per cent of organisations currently have no plans for AI at all. 

Where are organisations focusing?

The research within risk departments reveals clear priorities in current AI applications:

• Credit risk assessment (39 per cent)
• Fraud detection (39 per cent)
• Operational improvements (11 per cent)
• Product development (7 per cent)
• Governance enhancement (4 per cent)

This distribution suggests organisations are targeting areas with immediate, measurable impact. More than three quarters of the sample are prioritising improvements in credit and fraud predictions.

The resourcing challenge

Staff capability and capacity have been identified as barriers to achieving business aims through AI:

• Staff capability (27 per cent)
• Internal resource (21 per cent)

The good news is, the financial benefits vastly outweigh the resource investment required for safe and effective AI implementation.

The potential of AI 

Perhaps most notably, the research highlights a discrepancy between the current focus and where the potential from AI actually lies: 

• 46 per cent in operational efficiency
• 46 per cent in improved model predictions 
• 7 per cent in enhanced strategy and policy

This study has revealed that the potential in Operations has not yet been unlocked—almost half of the study believe it has the largest potential although only 11 per cent have cited Operations as a current AI focus. 

The path forward

The data points to a clear conclusion: financial institutions need to accelerate their AI adoption while strengthening their implementation frameworks. 

Success requires focus on three key areas:

1. Robust governance frameworks that enable, rather than inhibit, innovation

2. Systematic skill development across technical and business functions

3. Ramped up focus and effort on operational efficiencies 

Time for action

The research suggests the window for competitive advantage through AI adoption remains open, but it's narrowing. With 74 per cent of organisations at proof-of-concept stage or beyond, those yet to develop comprehensive AI strategies risk falling behind—not just in technical capabilities, but in their fundamental ability to manage risk effectively.

The message is clear: financial institutions need to move beyond exploration to implementation, beyond pilots to scaled solutions, and beyond technical experimentation to sustainable frameworks. This requires not just investment in technology, but in people, processes, and governance structures that can support long-term AI adoption.

As the financial services sector continues its AI transformation, the gap between leaders and laggards will likely widen. The question for risk leaders isn't whether to embrace AI, but how quickly they can build the capabilities needed to thrive in an AI-enabled future.

About the study

A team of risk and AI experts from Jaywing interviewed senior risk, data and analytics professionals from a wide variety of organisations across UK banks, building societies, financial services and retail firms. 

The study includes data from a large enough sample of organisations to publish initial findings at an aggregate level but we actively seek further participations to facilitate additional segmentations by firm size and category. ​

If you would like to participate in the study, please contact risk@jaywing.com.