FCA launches long-term review into AI's future in retail finance
The Financial Conduct Authority has launched a long-term review into the impact of artificial intelligence on retail financial services. Sheldon Mills, FCA Executive Director, stated the review will report to the Board in summer 2026 and seeks industry input by February 24, 2026.
Designing for the unknown
Sheldon Mills, FCA Executive Director, is leading a long-term review into AI and retail financial services, reporting to the FCA Board in summer 2026. The review aims to help the FCA maintain its leading role in shaping AI-enabled financial services, culminating in an external publication.
Mills emphasized that the review does not alter the FCA's established outcomes-based and technology-neutral regulatory approach.
This strategy provides flexibility for both the regulator and firms to adapt to rapid technological change, supporting UK growth while safeguarding consumers and market integrity.
The review is designed to prepare for the unknown, understanding how AI could reshape consumers' lives and markets, and how regulation can remain effective in a fast-evolving world.
From assistive to autonomous AI
The rapid evolution of AI, especially generative AI and emerging agents, is transforming financial services.
A 2025 survey indicates one in three UK customers use AI weekly for money management.
The FCA's review explores a 'proxy economy' where AI acts as an intelligent intermediary.
This ranges from assistive AI (explaining products) to emerging advisory AI (recommending actions) and autonomous AI (agents managing finances within consumer boundaries).
While promising efficiency, these raise critical questions about potential errors, consumer control, and the influence of commercial incentives on AI recommendations.
Navigating uncharted waters
The FCA's proactive stance is commendable for addressing future risks early.
However, the inherent unpredictability of AI development and market adoption poses a significant challenge to any long-term regulatory design.
The success of this review will hinge on its ability to foster adaptable frameworks rather than rigid rules.