The Financial Conduct Authority has launched a review into the implications of advanced AI on consumers, retail financial markets and regulators.
The Mills Review, which will be led by FCA executive director Sheldon Mills, is seeking views on four themes.
These include how AI could evolve in the future, including the development of more autonomous and agentic systems; how these developments could affect markets and firms; the impact on consumers; and how financial regulators may need to evolve to continue ensuring that retail financial markets work well.
The regulator said rapid advances in generative, agentic and emerging forms of AI mean the next phase of change could be “profound” and have the power to reshape markets and change the way firms compete and consumers use retail financial services.
Sheldon Mills said: “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.
“By taking a forward-looking view, the review will help the FCA continue to support innovation while promoting the safe and trusted adoption of AI in retail financial services.”
Although wholesale markets and broader societal impacts are out of scope, the FCA said the review recognises that developments in these areas may indirectly influence retail financial services and will be considered where relevant.
Feedback from the review will be used to create a series of recommendations to be reported to the FCA board in the summer, informing how the FCA can guide and respond to AI-driven transformation. The deadline for comments is 24 February.
Commenting on the review, Richard Pinch, senior risk director at Broadstone, said: “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.”
