The UK’s Financial Conduct Authority (FCA) has initiated a comprehensive review examining how advanced artificial intelligence could reshape retail financial markets and affect consumers.
The exercise, led by FCA Executive Director Sheldon Mills, will assess the implications of AI’s rapid evolution on market dynamics and financial firms, including its influence on competition, market structure, and consumer outcomes. The findings of the review are expected to be presented to the FCA board by mid-2026. The regulator clarified that the initiative does not signal an intention to introduce AI-specific regulation.
“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.”
Legal experts note that while AI adoption in customer-facing financial services in the UK remains relatively early-stage, momentum is building. Tom Callaby, partner at law firm CMS, said the use of AI in retail-oriented applications had so far been “limited”, but firms were actively exploring new opportunities. “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,” he added.
The move comes against the backdrop of growing pressure from lawmakers. On January 20, the parliamentary Treasury Committee released a report calling on financial regulators, including the FCA, to move beyond a “wait and see” stance on artificial intelligence.
The committee recommended that the FCA issue guidance by the end of the year clarifying how existing consumer protection rules apply to AI-driven systems, and outlining the level of understanding senior managers are expected to have of the technologies operating under their oversight.
