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The FCA has launched a review into the implications of advanced AI on consumers, retail financial markets and regulators.
United Kingdom
Finance and Banking
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The FCA has launched a review into the implications of advanced AI on
consumers, retail financial markets and regulators.
The review will be led by Sheldon Mills and builds on the
FCA’s existing work on AI. This includes its AI Discussion
Paper, AI Sprint, and AI Lab including AI Live Testing and its
Sandbox supported by NVIDIA.
The FCA highlights that AI is already embedded across financial
services. Rapid advances in generative, agentic and emerging forms
of AI mean the next phase of change could be profound, having the
power to reshape markets, change the way firms compete and how
consumers use retail financial services.
The FCA is seeking views on four interrelated themes:
How AI could evolve in the future, including the development of
more autonomous and agentic systems.
How these developments could affect markets and firms,
including changes to competition and market structure and UK
competitiveness.
The impact on consumers, including how consumers will be
influenced by AI, but also influence financial markets through new
expectations.
How financial regulators may need to evolve to continue
ensuring that retail financial markets work well.
While wholesale markets and broader societal impacts are out of
scope, the review recognises that developments in these areas may
indirectly influence retail financial services and will be
considered where relevant. The FCA is also separately doing
extensive work on the impact of AI in wholesale markets, especially
through our live testing partnership.
Feedback will shape a series of recommendations to be reported
to the FCA Board in summer 2026, informing how the FCA can guide
and respond to AI-driven transformation. This will culminate in an
external publication. However, the FCA has already said that it
does not plan to introduce AI-specific regulation. It will continue
to rely on its existing, principles-based regulatory framework
while considering how regulators need to evolve as AI becomes more
embedded in financial services.
The review follows the recent report from the Treasury Select Committee,
which said that the major public financial institutions, including
the FCA, which are responsible for protecting consumers and
maintaining stability in the UK economy, are not doing enough to
manage the risks presented by the increased use of AI in the
financial services sector.
The deadline for comments is 24 February
2026.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
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