FILE PHOTO: Signage for the Financial Conduct Authority (FCA), the Britain's financial regulatory body, is seen at its head office in London, Britain, March 10, 2022. REUTERS/Toby Melville//File Photo
LONDON, Jan 27 (Reuters) - The UK's Financial Conduct Authority on Tuesday launched a review into the impact of advanced artificial intelligence on retail financial markets and consumers.
The review, led by FCA Executive Director Sheldon Mills, will look at how the evolution of AI could affect markets and firms, including changes to competition and market structure, as well as the impact on consumers. Findings will go to the FCA board in mid‑2026. The regulator reiterated that it does not intend to introduce AI‑specific rules.
"As I begin this review, the technological landscape is evolving at a remarkable pace. It is entirely plausible that we will see widespread use of agentic AI systems, neuromorphic computing and quantum capability," Mills said. "These technology changes will take place in the context of the growth of digital finance, including blockchain and smart contracts, tokenisation and digital assets."
Tom Callaby, partner at law firm CMS, said that so far the use of AI in retail facing applications in the UK had been "limited" but firms were increasingly considering new use cases. "The FCA should not close itself off to updating or adjusting its approach, as it has been clear that a lack of tailored rules and guidance in key areas has held some firms back,” Callaby added.
The parliamentary Treasury Committee on January 20 published a report urging financial regulators including the FCA to move away from a "wait and see" approach to AI.
The committee said the FCA should publish guidance by the end of the year on how consumer protection rules apply to AI and how much senior managers need to understand the systems they oversee.
(Reporting by Prerna Bedi in Bengaluru and Phoebe Seers in London; Editing by Maju Samuel and Tommy Reggiori Wilkes)
