It has supported a wide range of projects developing new technologies, products and services to make these sectors more effective. In addition, it has also identified, and helped businesses overcome, barriers to developing and adopting these new innovations.
The importance of professional and financial services
Professional and financial services, including the legal, accounting and insurance sectors, are critical to the UK. They account for more than 14% of the UK economy, are worth over £190 billion to the UK annually, and employ some 5.5 million people.
The legal, accounting and insurance sectors also have much wider economic and social impact. They support the rest of the economy, as commerce requires each of these services. In societal terms, these are sectors people turn to, to plan for their future or in their hour of need, for financial support, wills or conveyancing among others.
They underpin much of what we do, whether it is economic or personal, and are also vital for the UK’s international trade. They account for £124 billion of UK exports and with around 40% of global trade using English and Welsh law.
The services also provide the benefit of being widely distributed across the country. 73% of the jobs they support are outside of London, with key centres in Edinburgh, Belfast, South Wales, Manchester, Birmingham and Leeds. And they play an important role in helping young people to enter working life, around 20% of all graduate entry jobs are in these sectors.
In the UK, we need these sectors to remain strong in the future.
The impact of AI and related data technologies
Technologies such as AI and data analytics are having a profound impact on the legal, accounting and insurance sectors. It’s clear that automating activities with the use of AI and related technologies enables them to be completed much more efficiently and effectively, but this is only a small portion of the opportunity.
By combining technology with service innovation, new markets and services will be unlocked. A report from PwC (PDF, 4MB) estimates that widespread adoption of AI in the legal, accounting and insurance sectors could lead to a 10% increase in their contribution to gross domestic product globally by 2030. Data technologies represent a huge opportunity here. However, with competitors around the world already capitalising on AI’s potential, there is also an urgent need for UK firms to move with the times to ensure they continue to provide world-leading professional services.
The NGS challenge: aims for a pioneering programme
The NGS challenge is delivered jointly by Innovate UK and the Economic and Social Research Council on behalf of UK Research and Innovation (UKRI). It has brought researchers, technology specialists and businesses together to develop the next generation of services for the accountancy, insurance and legal industries. Its fundamental aim is to ensure they are AI-ready, primed for the future and the changes that are coming, and able to make best use of data technologies.
Think of the sectors that undertake research and development and it is natural to focus on areas such as pharmaceuticals, manufacturing or engineering, not the legal, accounting and insurance sectors. These are not sectors that UKRI has traditionally been involved with, but they have much to gain from research and development (R&D). The NGS challenge has been a first step in engaging with them.
Supporting the wider use of AI and data analytics is much more than just a question of technology. It involves the complex questions of:
- how firms need to change their business models
- how professionals in traditionally quite conservative sectors can be helped to see the potential in AI
- how not to fear or ignore it, but instead use it to improve their business.
After all, the next generation of services will be driven by human attitudes and behaviours as much as by technology itself.
But adaptation and adoption cannot simply progress unmonitored. That’s why the NGS challenge has also examined and addressed the ethical aspects of using data technologies in these industries. A key goal of this is to ensure that consumers remain protected, and that data is used responsibly at all times while capabilities expand and develop.
Real world impact
The NGS challenge supported activities in four main areas, with an emphasis on making a real impact on businesses in each. These were:
- collaborative R&D projects on particular developments and applications of AI and related technologies
- projects specifically focused on data access
- research projects led by academic partners on the broader issues involved in the wider adoption of data technologies
- the development of a new AI for services network and community of practice.
The AI for services network was established to bring together a number of experts and contributors from across the sector, including AI and data technology specialists, academics, and law, accountancy and insurance professionals. The network has already encouraged greater collaboration among those involved with the challenge, while also building connections to people outside of it. It has been a vehicle for disseminating ideas out to the wider sectors, while also providing a way for researchers to listen to those sectors.
Looking at some of the projects in the insurance space, the TECHNGI project, led by Loughborough University, has shown the value in data sharing and standardisation. Its research outputs are already being used by regulators and policymakers in the UK and Europe. Other impacts from NGS challenge funding include projects creating improved motor insurance risk assessments, as well as reducing wider insurance fraud cases through voice recognition and AI innovations.
In the legal sector, a University of Oxford project is assessing the opportunities, benefits and reticence for adopting AI, with their outputs being used by law firms, regulators and legislators to consider how client data should be managed in an AI future. Elsewhere in the space, NGS-backed innovations are helping to improve legal aid access and online legal support tools. In addition, the Orbital Witness risk software is currently reducing the time and expense of commercial real estate on more than 2,000 properties a day.
In accounting, a collaborative design project headed up by Oxford Brookes University is providing support to mid-sized practices. Their unique AI readiness toolkit has already been provided to almost 150 companies and offers insight and support around AI’s impact on their business models, operations, people, processes and wider structures.
Other accounting-based projects supported by the NGS challenge include those creating better access to standardised corporate information through an open data platform. Also support by the challenge, the Xavier Analytics app gives AI-assisted analysis of account anomalies, liabilities and business insights for owners.
Find out more about funded projects and the impact they are having on industry.
Tangible results from the challenge
While a great deal of progress has been made in the development of these solutions, the benefits of investing in research and innovation can take several years to materialise fully. However, the challenge is already seeing clear and compelling signs of impact across a broad range of areas. For example, the £20 million of public funding has already led to the creation and retention of over 360 jobs, with over 1,000 more predicted in the next five years. Project participants have also raised over £100 million in private investment and their technologies are already in use by leading organisations across the UK and overseas.
One of the objectives of the programme was to help these sectors build their capability to engage with R&D, and that’s something we’ve achieved in a number of areas. NGS challenge participants have typically increased their expenditure on R&D by more than 500%, especially pleasing as 80% of business participants in the challenge are new to Innovate UK. Such has been the engagement we have seen that the AI for services network now has more than 1,400 members, and the collaborative R&D competitions were four times oversubscribed.
There have also been changes in the way that legal firms are training their staff, using materials that have been developed through the research projects. The challenge has led to an opening up of access to judicial datasets for AI, for the first time, and has worked with regulators and policymakers to inform governance principles for ethical and trustworthy AI.
The NGS challenge has been a £20 million pioneer fund that couldn’t fundamentally change such large and important sectors as law, accounting and insurance simply by itself. It has, however, demonstrated the real value of engaging in innovation for these sectors, as you can see from the benefits and impact shown above.
There still remain many opportunities to be taken advantage of, including reaching excluded communities that have not been served by these sectors very well as yet. More can also be done to overcome barriers to innovation that remain in these sectors, including entrenched structures and business cultures that are resistant to change.
The pioneering NGS challenge has shown that a job remains to be done to drive forward the adoption of AI and related technologies in some of the UK’s most important industries. However it has revealed that a programme focused in these areas is able to elicit real changes in these sectors.
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