Number of UK banks reporting AI-driven productivity improvements doubles

The number of UK banks reporting productivity gains from artificial intelligence (AI) has doubled as projects move from pilots to production.

According to Lloyds Banking Group’s latest Financial institutions sentiment survey, 59% of surveyed firms reported AI-driven productivity gains in the past 12 months, compared with 32% in the 2024 survey.

Banks also reported rising returns from AI in other areas. The latest survey found that 21% of respondents believe AI is directly driving business growth, compared with 8% in the survey a year ago.

Meanwhile, a third (33%) of respondents said AI is enhancing customer experiences, up from 14% in the previous survey. The same number said they have deeper customer insights through AI, compared with 18% in last year’s survey.

As a result of the improvements, half of the finance companies surveyed said they planned to increase spending on AI over the next 12 months.

Rohit Dhawan, director of AI and advanced analytics at Lloyds Banking Group, said the technology was moving into the execution phase.

“Institutions are building on early investments and delivering tangible outcomes, such as productivity gains and sharper customer insights. At Lloyds, we now have over 800 models in operation, representing more than 200 AI use cases, designed to enhance colleague and customer experience, and we believe that, with the right focus, the UK has an opportunity to lead in responsible AI adoption across financial services.”

Half of the businesses questioned in the survey said AI would help build a more technologically skilled workforce.

Digital challenger Zopa Bank also recently released survey findings that back the claims of productivity gains. Its survey, carried out with Juniper Research, revealed that UK banks could save £1.8bn over the next five years as a result of investing the same amount in AI, with large gains to follow. It found that 187 million hours would be saved, mainly as a result of back-office efficiencies.

While the banking sector is, not surprisingly, leading the way when it comes to AI investment, other sectors are backing the technology too.

According to figures from Tussell, the UK public sector has seen spending on AI grow from £58m in 2018 to £573m in 2025. The total spend of £3.45bn was through 1,309 contracts, between January 2018 to the end of July 2025.

For example, recent deals saw National Highways sign a £35m AI contract with Deloitte, and Durham County Council acquire an AI tool for social workers.

The biggest UK public sector AI buyer during the period, according to Tussell, was the Met Office, which spent over £1bn, largely due to its supercomputer contract with Microsoft in 2021.

Other big spenders were the Department for Science and Innovation, which invested about £409m over the seven years; the Ministry of Defence, which spent about £270m; Transport for London, which invested £260m; and the NHS, which spent £224m.

Tussell said while public bodies have been purchasing AI-based solutions for well over a decade, “recent breakthroughs – specifically in generative AI since the launch of ChatGPT in late 2022 – have spurred a fresh wave of interest in how government could benefit from this rapidly evolving technology”.