The Technology Working Group – chaired by Michelle Scrimgeour and supported by the Investment Association – has published its final report, focussing on the AI deployment strategies for UK investment management forms.

This new report shifts the Group’s focus from fund tokenisation, as explored in the first two reports published in November 2023 and March 224, to artificial intelligence.

Specifically, the report explores existing and future cases for AI within the UK’s asset management sector, as well as the barriers firms have or are expected to encounter in their AI adoption journey.

“I am thrilled to welcome today’s report from the Technology Working Group,” Tulip Siddiq MP, the economy secretary to the treasury and city minister said.

“It provides UK asset managers with a blueprint for harnessing the power of AI and capturing the enormous opportunities it creates.

“On the eve of the International Investment Summit, this report once again demonstrates UK financial services at its cutting-edge best.”

The report delves into the current posture of firms across the industry with regards to AI innovation, ranging from proven to developmental use cases.

Currently, early stage use cases include general purpose AI co-pilots, analysing ESG elements, predictive modelling, code creation, monitoring suspicious transactions, and investment intelligence powered by AI.

As far as factors impacting the use of AI in the financial industry, the report identified several enabling elements, but in equal measure a range of potential barriers.

While the UK investment management industry benefits from a mature risk management and government arrangement, as well as a vibrant fintech ecosystem, public mistrust for AI technology and sustainability concerns may overshadow these positives.

Legal uncertainties, skills shortages, and malicious misuse of AI is currently hampering innovation, though it poses the potential for a more stringent regulatory approach to AI.

It could also introduce new system-wide financial stability risks as AI continues to be adopted, leading to either mistrust in AI or enhancing AI’s capabilities.

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To improve the prospects of AI in investment management, the report made several recommendations, including the need for upskilling and more clear and consistent regulations.

They also noted the increase in the malicious use of AI, and recommended for more joint public and private sector action to combat this.

For legal and systemic risks, the report recommends working in tandem with relevant advocacy and regulatory groups while AI is being adopted, as to not stall innovation.

Lastly, the Group intends to continue fostering a boisterous fintech ecosystem in the UK to better ensure collaborative approaches to AI, regulation, security, and innovation.

The Technology Working Group was set up by the Asset Management Taskforce and is spearheaded by the HM Treasuring, The Financial Conduct Authority (FCA), and also involves other non-asset management stakeholders as well as members of the Taskforce.