FCA calls for stricter AI oversight

The Financial Conduct Authority (FCA) has called for tighter oversight of artificial intelligence in financial services, warning that AI will have a significant impact on retail finance over the next decade. The regulator issued the call as part of a broader review of AI adoption in the sector, highlighting both opportunities and risks.

The FCA found that a fifth of people are open to using AI for financial decisions. The regulator expressed concern about the potential for consumer harm if AI systems are not properly managed, particularly in areas such as lending, insurance, and financial advice. The FCA noted that AI could improve efficiency and access but also create new forms of bias and exclusion.

The announcement comes amid ongoing regulatory efforts across the UK and EU to address the rapid deployment of AI. The FCA stated that it will work with the government and industry to develop appropriate guardrails, though specific proposals have not yet been detailed. The regulator emphasised the need for a coordinated approach to ensure consumer protection without stifling innovation.