Barclays Ties AI in Banking to Cost Cuts and Higher Returns
Published: 11 Feb 2026
By AITestGuide Staff
Barclays reported a 12% rise in annual profit for 2025, highlighting the growing role of ai in banking in its cost and efficiency plans.
The bank said earnings before tax reached £9.1 billion, up from £8.1 billion a year earlier.
Barclays also raised its long-term performance targets, pointing to lower costs and a stronger US business as key drivers.
AI in Banking Linked to Day-to-Day Operations
Barclays said it is no longer treating AI as a test project. Instead, the bank has built AI in banking into its regular operations. In statements to investors, the bank linked AI use directly to:
- Lower operating costs
- Faster internal processes
- Better use of staff resources
This marks a shift from small pilot programs to wider, business-level use.
Cost Control Remains a Central Priority
Cost discipline remains a major focus for Barclays. The bank continues to reduce spending linked to old systems and manual work. Barclays said its cost-saving efforts include:
- Cutting back on legacy technology
- Automating routine and repeat tasks
- Simplifying internal workflows
For example:
- AI tools support data review and reporting
- AI helps manage customer service processes
- AI helps teams with risk checks
These changes reduce time spent on manual tasks and help control expenses.
Higher Targets Backed by Efficiency Gains
Barclays raised its performance outlook through 2028.
The bank now targets:
- A return on tangible equity above 14% by 2028
- A previous goal of above 12% by 2026
Barclays also plans to return more than £15 billion to shareholders between 2026 and 2028.
The bank said these targets rely on:
- Stable profits
- Ongoing efficiency gains
- Continued use of AI in banking
From Investment to Measurable Results
Barclays said AI investments work alongside long-term cost reduction programs. The bank does not expect instant results but sees steady improvement over time.
The 12% profit increase came as Barclays highlighted:
- Technology-driven savings
- Improved operational efficiency
Market conditions and growth in the US also supported results, the bank added.
Implications for Traditional Firms
Barclays is not alone in exploring AI for efficiency. Other banks have also pointed to technology as part of restructuring efforts. What sets Barclays apart is how closely it ties AI in banking to financial targets rather than experimentation.
In a regulated sector like banking, firms must manage:
- Compliance rules
- Data privacy concerns
- Risk controls
Barclays said it now has enough confidence in these systems to include AI-driven savings in its financial planning.
A Broader Signal to the Market
Barclays’ latest results suggest a broader trend. Traditional firms are moving AI from innovation teams into core business functions. For companies outside the tech sector, the message is clear:
- AI can support cost control
- AI can improve efficiency
- AI can contribute to profit growth
As more firms report results, investors are likely to look closely at how AI in banking and other sectors delivers measurable impact.
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