AI will be bigger than the 1986 Big Bang, say 87% of UK finance bosses
Key Points
- 87% of UK finance leaders expect AI to outstrip the 1986 Big Bang’s impact
- 55% want financial services activity to shift towards regional centres
- Just 9% expect future growth to stay concentrated in London
- 41% want AI to be the government’s top investment priority for the sector
- 66% say AI has made human decision-making more important in their role
Nearly nine in ten (87%) UK financial services leaders expect AI to change the industry more than the 1986 Big Bang, KPMG has found.
Tuesday (27 October) marks 40 years since the Big Bang reforms, which brought in electronic trading and helped establish London as a global financial centre.
KPMG’s latest UK Financial Services Sentiment Survey also found that 88% of leaders believe AI can deliver a productivity boost on the same scale as the one that reshaped the City four decades ago.
Unlike the Big Bang, leaders expect AI’s benefits to reach well beyond London and into the rest of the UK.
“AI will dwarf the technological developments I have seen over four decades,” said Fiona Fry, an Independent Non-Executive Director who started her financial services career during the Big Bang.
“It will enable firms to understand their competitive performance in a way not previously imagined, providing far more in-depth analysis of product performance and customer behaviour, thus enabling those who embrace it to thrive and grow,” Fry added.
Finance bosses want growth outside London
More than half (55%) of leaders want the balance of UK financial services to shift towards regional centres over the next decade, while 21% want it to concentrate further in the capital.
Over half (52%) expect future growth to come from non-London centres or spread more widely across the UK, and 39% expect balanced growth between London and the regions.
Only 9% of leaders expect growth to stay concentrated primarily in London.
Almost half (47%) named AI, technology and automation as the biggest factor shaping where financial services activity happens across the UK in the coming years.
“The Big Bang generated significant growth and transformed the UK’s financial markets, but its benefits were not felt equally across the country,” said Karim Haji, Global and UK Head of Financial Services at KPMG.
“AI offers a different path, with financial services leaders seeing it as the next Big Bang to drive innovation and stronger long-term growth more widely across regional centres,” Haji added.
City leaders want government to prioritise AI
More than nine in ten (91%) leaders said AI currently helps their workforce more than it hinders it, and 73% said it reduces errors in day-to-day work.
Cyber security and data privacy concerns topped the list of barriers to AI-driven productivity at 21%, ahead of AI and digital skills shortages at 17% and customer trust in AI at 15%.
Just 9% of leaders ranked regulatory uncertainty or complexity as the biggest obstacle.
Four in ten (41%) want AI and emerging technologies to become the government’s top investment priority for UK financial services over the next decade.
That is more than three times the 12% who chose financial inclusion and financial literacy, the next most popular answer.
Human judgement still matters
Two-thirds (66%) of leaders said AI has made human decision-making more important in their current role, and 83% said business relationships matter more today than they did a decade ago.
Many firms have also decided against AI investments in some areas because they judged human workers to have the edge in creativity (41%), security (39%) and relationship-building (33%).
“In the 1990s, some feared technology would diminish human skills; today, many worry about AI’s impact on jobs,” said Fry.
“In my view, just as computers brought an end to the office postie, AI will mean fewer highly repetitive jobs, while human judgement in assurance, risk identification and oversight will become more important, not less,” she added.
