What is Generative AI?

Generative AI is the broad category that covers large language models, image generators, and code assistants. For regulated UK businesses, its value lies in automating the creation of first drafts, summaries, and analysis across processes that currently consume significant professional time.

Consider a mid-market law firm that spends hundreds of hours each quarter reviewing contracts for non-standard clauses. Generative AI can produce a first-pass review in minutes, flagging deviations from standard terms and summarising key risks. The solicitor still makes the final judgement, but their time shifts from reading to reviewing, which is a fundamentally more efficient use of qualified expertise.

In financial services, generative AI is being used to draft suitability reports, produce meeting summaries for compliance records, and generate client-facing market commentary. Each of these tasks involves taking structured inputs and producing well-formatted text output, which is precisely what generative models excel at.

The governance challenge with generative AI is output quality assurance. Unlike traditional software that produces deterministic results, generative AI can produce subtly different outputs each time. This means firms need review workflows, confidence scoring, and clear escalation paths for edge cases. The FCA has signalled that firms remain responsible for AI-generated outputs, so a human-in-the-loop approach is essential for client-facing content.

The firms seeing the best returns from generative AI are those that identify high-volume, structured tasks where the AI handles the repetitive elements and humans handle the judgement. This is not about replacing people but about removing the bottlenecks that prevent skilled professionals from focusing on the work that actually requires their expertise.