Fears of AI-related job losses may not come to pass in the motor finance industry, due to customers’ use of the technology placing greater demands on providers.
That’s the view of Alex Hughes, chair of the motor finance division at the Finance & Leasing Association (FLA) and managing director at CA Auto Finance UK.
Speaking at the FLA’s Impact and Future of Finance Moment event, Hughes was asked about the impact of AI on the industry, and explained that the reality was proving different from what some may have expected.
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Hughes said: “AI is absolutely here and it is absolutely transforming the way that we have to work, but also the way the customers work, in terms of the amount of information that’s available to them, the ability to research what their best options are, the ability to generate very, very complicated and long complaints if they wish to do so, and all of that has to be dealt with. That puts an increased operational burden on us.
“I think everyone was thinking about AI as this thing that’s going to be very transformative from an operational perspective, and people were worried about having to downsize teams and lose staff. I see it as almost the opposite, actually.
“We’re seeing now – and I’m sure this is across the industry – the use of AI from the customer side is absolutely happening every single day. You can potentially put in a prompt for what you want to discuss or complain about or query or whatever it might be, and you can generate that without any industry knowledge whatsoever.
“Clearly the onus is on us as lenders to be prepared and to deal with that in a very genuine way. But also, at the same time, to recognise when something is AI and to recognise when something is maybe masking an underlying vulnerability or a situation that we need to understand.
“That adds a lot of complexity to our businesses and something that we need to be prepared for.”
Hughes added that there were complicating factors to the finance industry simply adopting AI to respond in kind.
He said: “Obviously we can also use AI on our side, but then there’s a lot more regulation and expectation around how that is used.
“So, it creates an asymmetry there, which is something that definitely needs to be taken into consideration.”
Driverless car proliferation not seen as imminent
Hughes was also asked at the event about the prospects for driverless car technology to affect the industry, and predicted that this would be a much slower process than with AI.
He said: “People have been talking about driverless cars at conventions and industry seminars for probably the last decade, and it’s always one of those things that is ‘a couple of years away’.
“I think we’re still in that kind of lead-in period, and whilst clearly there’s now even a timeframe – we might expect to see the first robotaxis in London maybe as early as the end of next year – in terms of a transformative impact on day-to-day people and their lives, I don’t really see it as necessarily something that’s going to happen in the short term.”
Major economic impact of car financing highlighted
The event was held to mark the publication of the FLA’s first impact report, titled The Hidden Engine Behind UK Growth.
Presenting the report at the event, Geraldine Kilkelly, director of research and chief economist at the FLA, highlighted the importance of the finance and leasing industry in supporting personal mobility – with more than £41 billion advanced to car buyers in 2025 – and in turn benefitting the economy.
She said: “From an economic perspective, mobility is a labour market input. In many parts of the UK, access to a vehicle determines whether someone can take a job, stay in employment, or expand their opportunities.
“So, motor finance reduces barriers to work, geographic mismatch, and inefficiencies in the labour market. In short, it makes the labour market work better.”
Kilkelly also highlighted the role of finance and leasing in supporting the UK’s green transition.
She said: “The economic challenge here is clear, and as we’ve heard, upfront cost barriers delay adoption.
“Our latest market data shows that more than 90% of private new electric vehicles are financed through FLA markets. This is a clear case of finance enabling technology adoption, investment acceleration and structural change, because transitions don’t happen unless we commit to financing the future.”