The Financial Conduct Authority will review how advanced AI could reshape the financial service sector and impact consumers.
The review, will be led by Sheldon Mills and builds on the FCA’s existing work on this area.
As part of this review the regulator is seeking input from the industry on AI could evolve in the future, particularly in relation to more autonomous systems. It will also examine the how these developments might impact markets, firms and consumers — and how financial regulators may need to evolve to address these challenges.
The FCA pointed out that AI is already embedded across financial services, but said rapid advances in generative, agentic and emerging forms of AI mean the next phase of change could be profound. It said this could have the power to “reshape markets, change the way firms compete and how consumers use retail financial services.”
This review comes after a recent report from the Treasury Select Committee which criticised both regulators and the government for a lax approach to AI, which MPs said potentially left consumers open to harm.
The FCA said that wholesale markets and broader societal impacts will be out of scope of this review, but it recognises that developments in these areas may indirectly influence retail financial services, and will be considered where relevant. The regulator it is separately doing extensive work on the impact of AI in wholesale markets, through its live testing partnership.
The FCA said feedback to this review will shapes its recommendations, which will be reported to the FCA Board in summer 2026. The deadline for comments is 24 February.
Commenting on this review Broadstone’s senior risk director Richard Pinch says: “The Mills Review is a clear signal that regulators are looking beyond today’s use of AI and towards its long-term impact on financial services, consumer outcomes and financial stability.
“As AI becomes more embedded in customer interactions, decision-making and operational processes, the regulatory focus must by necessity shift to governance and accountability to protect consumer outcomes.
“The challenge across the market will be to demonstrate that AI-driven models and tools align with the ethos of Consumer Duty as they evolve. Those that build strong oversight frameworks now will be better placed to innovate with confidence while meeting the FCA’s expectations.”
Announcing the review Sheldon Mills says: “AI is already shaping financial services, but its longer-term effects may be more far-reaching.
“This review will consider how emerging uses of AI could influence consumers, markets and firms, looking towards 2030 and beyond.”
He said that by taking a forward-looking view, the review will help the FCA support innovation, while promoting the safe and trusted adoption of AI in retail financial services.
