UK SMEs warned of financial risks from using generic AI chatbots
Small and medium-sized enterprises (SMEs) in the UK are facing warnings about the risks of relying on general-purpose artificial intelligence chatbots for financial guidance.
This follows recent concerns over the accuracy of financial information provided by popular AI models such as ChatGPT, Gemini and Copilot.
AI advice risks
Dan Mines, Co-Founder of Menna and former Chief Information Officer at Admiral Money, has cautioned business owners about using AI chatbots for critical finance decisions. He warned that these tools are often designed for wide-ranging conversation and not for the nuances of business finance. According to Mines, the improvisational nature of such chatbots could lead to incorrect answers and potentially serious business mistakes.
"AI chatbots can be very useful, but there's a real danger when businesses rely on them for financial decisions. Chatbots like ChatGPT or Gemini try to be everything to everyone - they improvise, try to please the user, and can get specific questions wrong. You wouldn't ask a general builder to fix your electrics, or a GP to perform heart surgery - it's the same with AI and finance. Using the wrong tool can give misleading guidance, and even small mistakes can have serious consequences for a business," said Dan Mines, Co-Founder, Menna.
SME financial fragility
Many UK SMEs are already highly vulnerable. New findings from credit insurance provider Atradius, in its Resilience Gap Report, indicate that 17% of SMEs turning over between GBP £1.1 million and GBP £10 million have less than GBP £50,000 in reserves to absorb a financial shock. In addition, 30% have less than four months of operational cashflow, and 9% have less than two months. The report reveals that incidents linked to AI have been a factor in depleting up to 76% of emergency cash reserves for some businesses.
With cash buffers this limited, even minor financial misjudgements can expose companies to significant risk. SMEs are contending with a funding gap estimated at GBP £22 billion. Late payments alone are believed to cost the UK economy GBP £11 billion annually.
Specialist tools needed
The reliance on generic AI platforms, rather than tools designed specifically for SME finance, is being cited as a risk factor. Firms such as Menna are focusing on platforms that combine business data with third-party sources, aiming to generate more accurate and actionable insights for SMEs.
These specialist systems are built to help companies monitor cashflow, assess customer creditworthiness, and manage financial risks while operating within UK regulatory frameworks.
The security and local governance of such platforms have been highlighted as another key differentiator. Menna operates with UK-based data and complies with ISO 27001 cybersecurity standards, offering services through a regulated environment.
Sector perspectives
The risk to SMEs is heightened by the scale of financial instability in the sector, coupled with the complexity of funding and credit decisions. Mines emphasised the importance of using tools purpose-built for small businesses.
"For small businesses, growth is important, but so is reducing risk from late or non-payment, and trusting the information they get from AI tools. Using a solution designed for SMEs ensures the guidance is reliable and based on real business data - generic AI just isn't built for this," said Mines.
