UK financial institutions set sights on growth as Lloyds highlights sector’s investment potential

UK commercial banking group Lloyds has highlighted the growing role financial institutions could play in supporting the country’s long-term development, as firms prepare to expand and invest across key areas such as AI, digital infrastructure, and workforce skills.

“The insurance sector is evolving fast – from life insurers expanding through pension de-risking to non-life firms adapting to inflationary pressures,” said Christian De Monte, Head of Insurance and Group Subsidiaries at Lloyds.

“Crucially, these players hold some of the UK’s largest investment portfolios. There’s growing focus on how the right conditions – from regulation to incentives – can unlock this capital to help fund infrastructure, energy, and the UK’s long-term growth.”

De Monte’s comments reflect findings from Lloyds Bank’s latest Financial Institutions Sentiment Survey, which gathers views from more than 100 senior leaders across banking, insurance, asset management, and private equity.

The report suggests that a majority of financial institutions are entering a phase of renewed investment and growth, even as the wider economic environment remains uncertain.

More than half (55%) of firms expect their business to grow in the next year, with this figure rising to 83% over a five-year horizon. A significant portion—37%—also plan to increase capital spending over the next 12 months. Top priorities include digital transformation (47%), workforce development (46%), and the adoption of AI and automation technologies (37%).

To deliver this growth, institutions are adapting their strategies. Nearly half (46%) are looking to expand in existing markets, while 42% are investing in emerging technologies and 37% are focused on developing new services.

Lisa Francis, Head of Institutional Coverage at Lloyds, noted: “This year’s survey paints a clear picture of a sector that is resilient, ambitious and ready to invest. Despite headwinds, financial institutions are continuing to focus on what matters: delivering for clients, investing in people and embracing new technologies. At Lloyds, we’re seeing this momentum across our customers and investors.

“There is a tangible sense of long-term opportunity, with the UK’s financial sector continuing to be well positioned to support sustainable growth and deliver great benefits for our clients and for the wider economy.”

Confidence in the UK’s position as a global financial centre also remains strong. Three-fifths (60%) of respondents believe the UK will retain its international status, although many agree that regulatory support and further investment will be needed to keep pace with global competition.

Overall, Lloyds’ survey shows a sector preparing not just for business expansion but for a broader role in funding the UK’s long-term economic goals—provided the right conditions are in place.

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