FCA executive director Sheldon Mills said regulators are in an "arms race" to
keep pace with AI adoption in financial services and need broader powers, the FT
reported. He urged UK regulators to assess whether large language models such as
ChatGPT, Claude and Gemini should be brought within regulatory rules. Mills said
regulators must themselves adopt AI to match the technology’s "speed, tempo and
scale" and to "monitor, detect and respond to risks." A report by Mills warned
that heavy personalization can improve product fit but may also produce
algorithmic bias, opaque pricing and targeted manipulation. It recommends the
FCA conduct a review within three to six months of risks from firms providing
financial services outside the regulatory perimeter and potential consumer harm
from rising use of AI in personal finance.
