UK Prime Minister Sir Keir Starmer has shared his government’s plans for AI, hinting that the nation will go down its own regulatory path rather than follow the likes of the EU and the US.
The PM addressed the media in a speech yesterday (13 January), in which he described AI as a “unique chance” to grow the economy and raise living standards – a significant issue for the current government as the pound falls to its lowest level since 2023.
However, as some media questions pointed out, the UK may not benefit from the technology for another three years. While AI is being used increasingly in a range of sectors, the technology is still in its infancy.
Various countries worldwide are still working on regulations and the big tech companies looking to set up a base are eagerly waiting to see the plans of each country before they do so.
On the UK’s regulatory stance, Starmer said: “When it comes to regulation we will be pro-growth and pro-innovation.”
Though this isn’t an uncommon statement for a leader to make when talking about new technology, the prime minister continued by saying that the UK is in control of its own regulations and that “we will go our own way on this”.
So far the world’s approach to regulating AI has been safety first. In September, the UK, US and EU signed an international treaty focusing on protecting human rights, global AI governance and ensuring transparency.
This agreement marked the first treaty on AI and its cautious undertone wasn’t surprising, as the full potential of the technology is still not fully understood. Complicating matters is the fact that bad actors have been using AI to defraud people and spread misinformation.
Starmer’s speech hinted at a change of approach from the UK, which could be due to the pressure of improving the economy. AI’s potential for improving efficiency across various sectors, including financial services, is a common talking point.
He said: “We will test and understand AI before we regulate it to make sure that when we do it is proportionate and grounded in science. But at the same time, we will offer the political stability that business needs.
“Put simply, our message to those at the frontier of AI capabilities is this, we want to be the best state partner for you anywhere in the world. That is the measure of our ambition.”
In addition to Starmer’s speech, the UK government revealed its AI Opportunities Action Plan. Suman Rao, Managing Director for the UK and Ireland at Avaloq, has commented on the implications of the plans will have on wealth managers.
“The outlook for artificial intelligence in the UK received another significant boost yesterday, with the announcement of the AI Opportunities Action Plan serving as a clear signal of the Government’s commitment to the technology. The plan – which the UK Prime Minister aims will ‘make Britain the world leader’ in AI and comes alongside an investment of £14bn from private lending tech firms – is just the latest signal that it’s time for UK wealth managers to consider how best to adopt AI,” Rao said.
“AI has moved from an exciting yet nascent technology to something that all wealth managers must have a plan for. Today’s news is the latest statement of intent from the UK that it foresees playing a leading role in the development and deployment of AI, and while the Government’s plan is focused on the UK public sector, it is critical that financial services firms take this opportunity to get on board too and help spearhead future innovation.”
Rao explained that 2024 research revealed that the majority of UK wealth managers (87%) believe AI will be integral to their future work and the UK wealth management industry as a whole, bringing benefits across client onboarding, meeting summaries and regulatory checks.
“For wealth managers that have yet to consider AI, their priority should be understanding the risks and opportunities involved, and how these best fit with their business model. Our research shows that UK investors are most comfortable with using AI in conjunction with humans for a range of investments tasks,” Rao concluded.
“They are far less comfortable with delegating full responsibility to AI, indicating a clear continued need for the human touch. With the pace of AI change only accelerating, wealth managers need to determine exactly what split of human versus machine is right for their business in the future.”