UK banks are projected to invest over £1.8bn into generative AI (GenAI) technologies by 2030, as they look to seek gains in productivity, cost-efficiency and service excellence, Zopa Bank has stated.

The bank’s GenAI – Transforming the UK Banking Sector report, which was conducted with Juniper Research, revealed that while banks are set to spend this amount on updating their respective technologies, it is also set to result in a 100% return on investment (ROI) within the first major cycle of deployment.

Zopa said this strong ROI is due to the targeted ways in which GenAI can unlock efficiencies across banking, with measurable efficiency gains trough saving time and cost-savings across customer service, portfolio management and back-office operations.

As a result, the use of GenAI is set to save 187 million hours of work by 2030.

However, this is set to lead to a reduction of 27,000 jobs across the UK banking sector in this period, equating to 10% of the workforce.

Zopa said that banks still need to find the right talent and skills to use GenAI effectively, so while the technology can put some existing roles at risk, it can also create them and have a positive impact on the industry.

Chief technology officer at Zopa, Peter Donlon, commented: "GenAI is no longer a distant concept - it is here, and it is already reshaping jobs, industries, and entire economies at remarkable speed. In the years ahead, few aspects of our professional and personal lives will remain untouched by its influence.

"Nowhere is this shift more consequential than in financial services. The banking sector in particular, long known for its resilience and ability to adapt, is now at the forefront of the GenAI revolution."

Zopa found that the use of GenAI differs across the sector. While challenger banks are typically smaller, these banks operate primarily through digital channels, offering customer focused services with lower fees, user-friendly apps and faster account setup compared to high street banks.

The group stated that effective GenAI deployment can unlock profitability, and its use and integration at a platform level as been a key tool for the most successful digital banks in the world.

It added that high street banks need to look to close this gap or they will be "increasingly bypassed by digital-only challengers".

"As the industry embraces this new wave of innovation, understanding its full implications has never been more important," Donlon added.

"For the first time, this study provides a comprehensive look at the seismic impact of GenAI on the UK banking industry - as both a force for extraordinary innovation and a catalyst for deep structural change."

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