The financial services sector will need to recruit and retrain around 450,000 highly skilled workers over the next decade as artificial intelligence reshapes the industry, according to a major HM Treasury-backed report.
The study warns that up to half of the tasks carried out across most financial services roles could eventually be automated as AI adoption accelerates, fundamentally changing how firms operate across banking, lending, insurance and advice.
The report, A Workforce Transformed, was published by the Financial Services Skills Commission with support from HM Treasury, Lloyds Banking Group, PwC, TheCityUK and the City of London Corporation.
It highlights growing pressure on financial services firms to invest heavily in workforce skills, governance and operational transformation as AI tools become increasingly embedded across the sector.
SKILLS CHALLENGE
The findings are likely to resonate strongly across the mortgage market, where lenders, brokers and fintech firms are rapidly deploying AI across underwriting, servicing, compliance, customer support and operational workflows.
The report argues that while AI will significantly automate administrative and process-driven activity, human expertise will remain critical – particularly around customer outcomes, regulatory oversight, judgement and complex decision-making.
It also warns that failing to address the scale of the skills challenge could threaten the long-term competitiveness of the UK financial services sector.
The Financial Services Skills Commission said the sector’s future workforce would increasingly require a combination of technical capability, critical thinking and specialist industry expertise.
The report marks the first phase of a wider programme examining the impact of AI and disruptive technologies on the financial services workforce, with further recommendations due by early 2027.
PROFOUND CHANGE
Claire Tunley (main picture, inset), CEO at the Financial Services Skills Commission, said: “Artificial intelligence and other disruptive technologies are ushering in a period of profound change for financial services.
“While the opportunities for innovation and growth are clear, realising them will depend on strong leadership, robust governance, high-quality data, continued focus on customer outcomes and, crucially, prioritisation of skills.”
She added: “Our research shows that up to half of the tasks, within most roles, could be automated by AI, meaning that skills priorities will shift towards a blend of technical skills, behaviours and sector-specific expertise.”
NEW PRODUCTS
Sharon Doherty, Chief People and Places Officer at Lloyds Banking Group, said AI was already transforming financial services delivery and creating “significant opportunities to improve productivity, enhance customer outcomes and develop new products and services”.
Meanwhile, PwC warned firms would increasingly need staff capable of combining technical knowledge with sector expertise and critical thinking as automation reshapes traditional financial services roles.
