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

The Bank of England lowered rates recently for the first time since 2020, and interest rates are expected to keep dropping in the short to medium term putting additional pressure on the income side as well. Consequently, banks are refocusing on cost discipline and non-interest income growth, with 85% of banking executives saying that cost management is a top strategic priority. At ServiceNow, we see this consistently echoed by the C-suite of our financial services customers. 

Adding to the cost challenge, regulatory pressure on operational resilience has intensified with both the UK Operational Resilience and EU DORA compliance deadlines looming in 2025. It is notable that one of the key drivers for these regulations was the blurring of lines between FinTech and traditional financial services. All financial services organisations are now technology organisations, with the costly engineering staff to prove it. 

It is no surprise then that one of the key cost drivers has been an increase in staff costs. In addition to the general recent pressure for wages to keep up with high inflation across industries, the increase in financial services has been primarily driven by the need for high skilled workers across key functions. From risk and finance to technology and HR, specialised expertise is required to build modern, digitised, customer centric and resilient financial services. And it doesn’t come cheap. 

Financial services leaders now find themselves having to precariously balance compliance, operational resilience, technology investment and cost efficiency. This begs the question; how can financial service executives walk this tightrope? They should, and most already are attempting to, identify how to best leverage technology to maximise the productivity of the high value humans who not only crave, but demand complex and impactful work. 

Many have turned to Gen AI in the search for productivity, 60% of UK financial institutions believe Gen AI can deliver significant cost savings and improvements to operational effectiveness, and banking as a sector has the highest AI investment budget allocation globally. While Gen AI is undoubtedly transformative, it is only as powerful as the platform it’s built on. Offering generic Gen AI capabilities to employees has thus far failed to unlock transformative systemic benefits. Benefit realisation is further limited by employees being stuck in manual processes or swivel chairing to get data from a myriad of disparate systems. 

For Gen AI to give time back to employees and generate return on investment it needs to be specifically built for and trained on digital workflows across functions. Processes need to be digitised and optimised, while systems need to be interconnected within a single platform.  ServiceNow has taken just this approach. Explore how the NOW platform is digitising workflows and bringing actionable AI to every corner of financial services operations across some of the most complex UK and global financial services institutions, returning thousands of hours to employees at speed and scale.

Register for our webinar Navigating Consumer Duty with Effective Governance on 10 October to learn more.