The FCA has published a review looking at how AI could reshape retail financial services. The Mills Review, which was launched in January, looks at 4 major shifts likely to impact these markets:
- transformation of firm operations, with AI potentially being embedded into almost every function by 2030, and the role of people will gradually become that of an observer there to monitor outcomes and step in if systems go outside set parameters;
- evolution of customer journeys, extending over time to complete financial management;
- reshaping of competition and market power, enabling new distribution channels, but with the warning that this is likely to create significant dependencies on key suppliers; and
- amplification of fraud and cyber risks, so supervision and defensive measures must progress with the threats.
Consumers are already happy to use agentic AI – with around 20% of people likely to use AI that can act autonomously within pre-set goals, but there is still concern about trust and control.
The review sets out 7 recommendations for the FCA to consider:
- securing and adapting the regulatory perimeter;
- strengthening system-wide coordination and oversight;
- monitoring the transition to autonomous models and adapting regulatory frameworks;
- scaling up the AI Lab;
- enabling the foundations for agentic finance;
- building and adopting an AI-enabled agentic supervisory model; and
- developing a trusted public-interest AI-enabled financial capability service.