{"id":495945,"date":"2025-10-13T10:52:09","date_gmt":"2025-10-13T10:52:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/495945\/"},"modified":"2025-10-13T10:52:09","modified_gmt":"2025-10-13T10:52:09","slug":"experts-reckon-generative-ai-could-add-billions-to-the-value-of-these-5-ftse-100-stocks","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/495945\/","title":{"rendered":"Experts reckon generative AI could add billions to the value of these 5 FTSE 100 stocks"},"content":{"rendered":"

\"Number<\/p>\n

Image source: Getty Images<\/p>\n

Not all members of the FTSE 100<\/strong> will emerge as winners from the advance of artificial intelligence (AI). For example, in August, WPP<\/strong>, the advertising and marketing agency, issued a profit warning. Many commentators believe this was caused (in part) by AI equipping some of the group\u2019s customers with the tools to do more creative work themselves. Fortunately, it shouldn\u2019t take too long before we know whether WPP\u2019s business is in terminal decline or if it\u2019s experiencing a temporary downturn.<\/p>\n

On the other hand\u2026<\/p>\n

However, according to a firm of management consultants, the financial services sector should benefit. McKinsey & Company reckons the technology will add $200bn-$340bn in value to the global banking sector. If they\u2019re right, the FTSE 100\u2019s five banks will be among the beneficiaries.<\/p>\n

Generative AI \u2013 the process of creating content by learning patterns from huge volumes of data \u2013 is being used by large financial institutions to improve the customer experience, minimise risk, identify market trends and enhance productivity.<\/p>\n

Barclays<\/strong> (LSE:BARC<\/a>) has created a \u201ccolleague assistant\u201d that helps reduce call handling times by instantly providing its staff with answers to customer queries. It\u2019s also analysing data to deploy \u201cintelligent agents\u201d to help automate routine tasks.<\/p>\n

The bank\u2019s electronic trading platform \u2014 \u2018BARX\u2019 \u2014 now features a bot (an AI-powered assistant) to enable its clients to develop the most appropriate investment strategy<\/a>.<\/p>\n

AI\u2019s also helping it analyse millions of transactions to automatically detect suspicious behaviour and reduce fraud. In addition, the technology\u2019s being used to meet its regulatory obligations more quickly with less need for human intervention.<\/p>\n

Craig Bright, the bank\u2019s chief information officer, says AI is a \u201cstrategic augmenter\u201d with productivity \u201cno longer defined just by individual effort\u201d.<\/p>\n

No guarantees<\/p>\n

But this fourth industrial revolution brings with it some challenges. According to The Massachusetts Institute of Technology, 95% of organisations have reported no return from their investment<\/a> in generative AI, despite an annual spend of $30bn-$40bn. Barclays could be one of these.<\/p>\n

Also, more cloud-based applications could make the bank vulnerable to a cyber attack. And we know how damaging these can be.<\/p>\n

However, McKinsey reckons most of the potential advantages come from improved productivity and the associated cost savings. These could be worth 2.8%-4.7% of the banking industry\u2019s revenues.<\/p>\n

A bit of an outlier<\/p>\n

And the efficient use of its resources is one area where Barclays lags behind its peers. In 2024, it had the highest cost:income ratio (62%) of the FTSE 100\u2019s banks. But if it could use AI applications to match the average of 57%, it would be able to reduce its operating costs by around \u00a31.3bn a year. For context, its 2024 post-tax earnings were \u00a36.3bn.<\/p>\n

In 2025, it hopes to improve this ratio by one percentage point. For 2026, it\u2019s targeting the \u201chigh 50s\u201d. Of course, it\u2019s impossible to know how much of the anticipated savings have already been factored into the bank\u2019s share price. But at the moment, its price-to-earnings ratio puts it in the middle of the pack among its closest rivals.<\/p>\n

All efficiencies \u2013 whether achieved using AI or other means \u2014 will help improve the bank\u2019s bottom line, which can only be a good thing. As the FTSE 100\u2019s least efficient bank, it has the most to gain. On this basis, I think Barclays shares could be worth exploring further.<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Not all members of the FTSE 100 will emerge as winners from the advance…\n","protected":false},"author":2,"featured_media":495946,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3163],"tags":[323,1942,27800,2166,2168,2169,2170,2171,2172,2173,2174,53,163194,16,15],"class_list":{"0":"post-495945","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-category-growth-shares","11":"tag-category-investing","12":"tag-partner-feeds-dbc-media","13":"tag-partner-feeds-fineco","14":"tag-partner-feeds-flipboard","15":"tag-partner-feeds-msn","16":"tag-partner-feeds-pluto-invest","17":"tag-partner-feeds-sharesight","18":"tag-partner-feeds-yahoo-uk","19":"tag-technology","20":"tag-tickers_global-lse-barc","21":"tag-uk","22":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115366484382533928","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/495945","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=495945"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/495945\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/495946"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=495945"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=495945"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=495945"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}