The UK financial services sector is facing a convergence of pressures that are reshaping the way institutions operate. Regulatory demands, heightened customer expectations, persistent technology debt and operational risks are combining to create a moment where transformation is no longer optional. The institutions that respond decisively will be positioned to strengthen compliance, protect margins and compete effectively in a rapidly evolving market.

Regulatory change is leading the pressure. The Financial Conduct Authority’s Consumer Duty represents the most significant compliance overhaul in two decades, shifting the focus from process-based checks to demonstrably good customer outcomes. This new standard increases the complexity and accountability of compliance operations. The scale of the challenge is already visible, more than a third of financial services firms have faced penalties in the past year for failing to meet evolving requirements, and nearly two-thirds report growing difficulty in keeping pace.

Technology debt is an equally urgent issue. Over 90 percent of UK financial institutions still rely on outdated systems, with one-third stating that the majority of their core platforms are legacy solutions. This creates real operational risk. Barclays, for example, experienced 33 service outages between 2023 and 2025, underlining how ageing infrastructure can disrupt customer service, erode trust and invite regulatory scrutiny.

Customer expectations have also accelerated. Consumers now expect immediate service and full contextual awareness in every interaction. Research shows that 72 percent demand instant responses, and 70 percent expect service teams to know their history without prompting. Traditional operating models, designed for slower, more fragmented service delivery, are ill-suited to meet these standards. Institutions that cannot adapt risk losing customers to digital-first competitors.

Operational resilience is now a priority for the Bank of England, yet data governance remains a weak spot for many firms. Failures in data retention and accuracy are not just compliance risks, they can have direct financial consequences. In one recent example, poor data management may prevent consumers from claiming up to £1 billion in compensation for inflated car loans.

These issues are interconnected and extend across the core operational areas that determine performance and competitiveness: client onboarding and KYC/AML compliance, lending and credit operations, finance and treasury management, claims and case management, fraud detection and risk management, and customer service and retention. Inefficiencies in one domain often cascade into others, magnifying cost, risk and reputational exposure.

Intelligent Automation offers a way to address these challenges at both the tactical and strategic level. By combining robotic process automation, artificial intelligence, machine learning and advanced analytics, IA enables institutions to streamline operations, improve decision-making and strengthen compliance without wholesale system replacement. More importantly, it creates the foundation for a new operating model, one that is faster, more accurate, and able to anticipate and respond to both customer needs and regulatory changes in real time.

This paper explores how IA can be applied across six critical domains in financial services, showing where the technology delivers measurable improvements today and how it can position institutions for sustainable growth and resilience in the years ahead.

Access the whitepaper here