The majority (87 per cent) of pension professionals confirmed their firm is using artificial intelligence (AI), a survey by the Society of Pension Professionals (SPP) has revealed, indicating a widespread adoption of AI within the UK pensions industry.

However, the survey also found that more than three quarters (77 per cent) of pension professionals currently use AI in only 1-5 per cent of their services.

Despite this, the SPP suggested that in the next 10 years, the use of AI in the pensions sector is expected to increase “significantly”, with 41 per cent of pension professionals expecting AI to be used in 10-20 per cent of their services.

Over four in 10 (41 per cent) of pension professionals expect it to be used in up to 50 per cent of their services and 18 per cent expect it to be used in more than 50 per cent of their services.

As for the benefits of AI, 61 per cent of respondents said the largest benefit was an increase in speed, while 26 per cent said a reduction in costs.

The SPP noted that expected benefits also include improved pattern analysis in large data sets, early problem detection, scalability, and increased personalisation.

The survey also asked respondents what they believe the biggest risks of using AI were and 65 per cent said hallucination/inaccuracy.

Meanwhile, 10 per cent said the biggest risk was bias, 6 per cent said data protection/cyber security, while 19 per cent said that there is no significant risk if AI is managed well.

The survey also revealed barriers that could affect the widespread adoption of AI across the pensions industry, including organisational nervousness (39 per cent), customer concerns (16 per cent), cost of adoption and integration of AI (13 per cent), and regulatory restrictions (3 per cent).

However, 29 per cent of pension professionals said there is no significant barrier to the widespread adoption of AI.

Commenting on the findings, SPP council member and Squire Patton Boggs partner, Matthew Giles, said the results are “very helpful” in “testing the mood” of the pensions industry on AI.

“We have obtained a helpful snapshot of the extent to which AI is being utilised today and also a forecast of how adoption will increase in the future,” he continued.

"Although the survey highlights risks and barriers to more widespread use of AI, it also identifies clearly identifiable benefits and overall indicates considerable enthusiasm for the technology within the pensions sector.”

---