Lloyds Banking Group has become the first UK lender to introduce an artificial intelligence tool to help customers make investment decisions. The pilot is running with a small group of customers through its Scottish Widows pensions and investments arm, offering what the bank describes as investment 'guidance' rather than regulated financial advice. The product is expected to be rolled out more widely later this year.
Scottish Widows CEO Chira Barua said the tool would act 'like a satnav for investments,' helping customers navigate options without making decisions for them. The distinction is critical: guidance is broad and generic, while financial advice must be tailored to an individual and is subject to far stricter regulatory requirements.
The move is part of a broader push by British banks, including HSBC and Barclays, to compete against specialist wealth managers and expand their fee-based businesses as lending income remains pressured.
Experts warn the use of AI for advice carries risks, including the potential for algorithms to amplify mistakes, mis-sell products, and create unexplainable outcomes for customers or supervisors. The Bank of England is closely monitoring the rollout of such AI technology.
Separately, the UK's Financial Conduct Authority (FCA) has launched a review into how AI could reshape financial services, including whether the technology could shift market power away from regulated firms. Lloyds is also among eight institutions, including Barclays and UBS, participating in an FCA program to test AI-enabled 'targeted support,' a new, lighter-touch regulated activity designed to help close the advice gap.