AI trends in financial services: what firms need to know in 2027

For UK financial firms planning their 2027 budgets, AI investment should begin with a business process that can be improved and a clear limit on what the system may do. AI trends in financial services point towards more connected automation, making governance and cybersecurity part of the investment decision.

The 2024 survey by the Bank of England and Financial Conduct Authority (FCA) found that 75% of responding firms already used AI. Building on that baseline and current guidance, we expect five priorities to shape 2027.

Figure 1  AI adoption among survey respondents

Source: Bank of England and FCA, 2024. Survey samples differ between years.

Agentic AI with controlled authority

Agentic AI uses software tools to carry out tasks across several steps. An agent could assemble an onboarding file, identify missing documents and route exceptions to a reviewer. Before allowing it to contact clients or change records, define which actions need approval.

Follow the NCSC’s advice on agentic AI: give agents distinct identities, restrict permissions and retain an emergency stop. Enforce boundaries in connected systems, with approvals for consequential actions. Instructions in a prompt alone cannot provide that protection.

Automation measured by completed work

AI can help prepare investor due-diligence responses by retrieving approved policies and drafting answers with links to supporting records. Staff should verify each claim before submission.

Assess the cost per completed, checked response, including human review, integration and ongoing support. Track corrections and turnaround time against a manual baseline. Measure errors across document types, since success with one template can hide failures elsewhere. A faster draft has little commercial value if verification absorbs the saving. Alternit One’s discussion of AI readiness for investment firms explains the foundations that support this approach.

Governance that can be demonstrated

The FCA’s approach to AI uses existing frameworks, including senior management accountability. Where the Consumer Duty applies, firms also need to assess customer outcomes, including whether automated support meets customers’ needs.

Maintain an AI register with a business owner, approved uses and data sources. Include embedded software features and unapproved AI use by staff. Record testing, material model changes and reviewer decisions. For systems affecting customers, test accuracy and unfair bias before deployment and after significant updates. Compliance teams need evidence of how a decision was reached and who could intervene.

Reporting readiness has a 2027 deadline

From 18 March 2027, the FCA’s new reporting rules introduce requirements for operational incidents and material third-party arrangements. The scopes differ: incident reporting includes all firms with Part 4A permission, while material third-party reporting covers specified categories, including enhanced-scope Senior Managers and Certification Regime firms. Firms within the latter scope must maintain a register, submit it annually and notify new or significantly changed material arrangements.

Assess AI suppliers against the relevant materiality criteria. Agree with your managed service provider (MSP) how to gather evidence and escalate incidents that meet reporting thresholds. The FCA makes clear that outsourcing does not transfer regulatory accountability. Two applications may depend on the same underlying model provider, creating a shared point of failure. Test that provider’s outage and confirm staff can continue essential work.

Cybersecurity must address AI trends in financial services on both sides

The NCSC’s assessment to 2027 anticipates more effective cyber intrusions and faster exploitation of known vulnerabilities. Financial firms and MSPs should prioritise exposed systems for patching and strengthen identity protection. AI-assisted alert triage can help security teams handle volume, but responses that interrupt trading or client access should follow tested approval rules.

AI systems also need protection. Malicious instructions hidden in a document can manipulate an agent through prompt injection. Restrict accessible data and tools, monitor unusual actions and test containment. Review whether suppliers retain prompts or use them for training before sharing confidential information. Give staff approved tools and clear data-handling rules, supported by cybersecurity services that cover the connected environment.

Table 1  Practical priorities for 2027

Priority	Action	Evidence to retain
Agentic AI	Limit permissions and require approvals.	Approval and shutdown tests.
Automation	Measure checked outputs against baseline.	Cost, time and corrections.
Governance	Assign owners and record decisions.	AI register and testing records.
Reporting	Confirm scope and prepare reporting.	Escalation plan and supplier register.
Cybersecurity	Patch, restrict tools and test containment.	Patch records and containment tests.

Preparing your firm for 2027

Choose one workflow with measurable value, identify its failure scenarios and agree ownership across operations, compliance and your MSP. Expand only when testing shows that quality, access controls and recovery arrangements work. Include staff training and ongoing assurance in the budget.

Alternit One’s AI services support secure deployment, governance and practical user training. To discuss your firm’s AI priorities for 2027, speak to Alternit One.