The FCA has called on AI providers to help consumers understand the limitations of financial information and advice generated by their models through “clear, proportionate and consistent disclaimers”, prompting a mixed response from across the industry.
The Financial Conduct Authority has called on providers of general-purpose AI models to help consumers better understand the limits of financial information and advice generated by their systems through the use of “clear, proportionate and consistent disclaimers”.
The comments were made alongside the FCA’s latest report, AI in financial services: good practice and areas for improvement, and have prompted industry discussion around the role of AI in financial decision-making and the level of consumer protection required.
Moneybox welcomed the move, with Brian Byrnes, director of personal finance at Moneybox, describing it as a “significant step”.
He said: “Clear signposting requirements for general-purpose AI is a significant step towards helping consumers make more informed financial decisions.”
Byrnes pointed to Moneybox research showing that “almost one in five (19%) would be just as comfortable relying on AI recommendations about where to save as those from an FCA-regulated provider, despite the very different protections available”.
Quilter also welcomed the FCA’s approach. Sam Christopher, proposition director at Quilter, said: “The FCA’s decision to call directly on AI providers to help consumers understand the limits of financial information and advice generated by their models is a significant and welcome step.”
He added that “general-purpose AI is increasingly influencing financial decisions before someone ever reaches a regulated firm, so consumers need clarity about what these tools are providing and what protections they have.”
However, Christopher also cautioned against an overly restrictive approach to regulation while the technology continues to evolve, saying: “The FCA is right to put consumer protection at the heart of its approach while giving firms room to innovate, test and learn.”
Not all commentators believe disclaimers alone will be sufficient.
Amal Jolly, CEO of Saturn, said: “Simply asking big tech companies to put disclaimers on their AI-generated financial advice is not enough. The regulator and Government need to act before consumers suffer serious harm.”
Jolly highlighted findings from Saturn’s research paper, Artificial Authority, which the company said found AI chatbots were providing inaccurate financial advice 57% of the time.
“Our research paper, Artificial Authority, found that AI chatbots are giving out inaccurate financial advice 57% of the time,” he said.
According to Saturn, testing of 18 AI models across more than 10,000 financial queries found examples of calculation errors, missing risk warnings, overlooked tax changes and instances where models generated incorrect information.
Jolly added: “The FCA is right to embrace AI innovation, but consumer protection must evolve just as quickly. If AI is effectively guiding people’s financial decisions, it needs appropriate regulatory oversight, clear accountability and meaningful consumer protections.”
Main image: AI, luke-jones-tBvF46kmwBw-unsplash
