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UK Regulator Opens Review into AI’s Growing Role in Retail Finance

By  |  January 27, 2026

The UK’s Financial Conduct Authority (FCA) has launched a new review into how advanced artificial intelligence could reshape retail financial markets and affect consumers, according to Reuters.

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    The initiative, announced on Tuesday, will be led by FCA Executive Director Sheldon Mills and will examine how the rapid development of AI may influence competition, market structure, and business models across the financial sector. The review will also assess potential risks and benefits for consumers, per to Reuters. The regulator said the findings will be presented to the FCA board in mid-2026.

    Despite the scope of the review, the FCA reiterated that it does not currently plan to introduce rules written specifically for AI. Instead, the authority intends to evaluate how existing regulatory frameworks can respond to emerging technologies, according to Reuters.

    Mills said the pace of technological change is accelerating and could soon transform the financial landscape. He pointed to the possible widespread adoption of agentic AI systems, neuromorphic computing, and quantum technologies, as well as the continued growth of digital finance. This includes developments such as blockchain, smart contracts, tokenisation, and digital assets, according to Reuters.

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    Industry experts say AI has not yet been widely deployed in consumer-facing financial products in the UK, but that is beginning to change. Tom Callaby, a partner at law firm CMS, noted that while adoption has so far been limited, firms are increasingly exploring new ways to use the technology, per to Reuters. He also said the FCA should remain open to adjusting its regulatory stance, arguing that the lack of tailored rules and guidance has slowed progress for some companies.

    Pressure on regulators to act more quickly has also come from lawmakers. The parliamentary Treasury Committee published a report on January 20 urging financial regulators, including the FCA, to move away from what it described as a “wait and see” approach to AI, according to Reuters.

    The committee recommended that the FCA publish guidance by the end of the year clarifying how consumer protection rules apply to AI and outlining how much senior managers should understand about the systems they oversee. As the financial sector continues to experiment with advanced technologies, the FCA’s review is expected to play a key role in shaping how AI is integrated into the UK’s retail financial markets.

    Source: Reuters