FCA eyes tougher AI rules as Brits turn to chatbots for financial advice
The Financial Conduct Authority (FCA) has called for greater powers to regulate artificial intelligence after warning the UK’s financial rulebook must evolve to keep pace with the number of consumers turning to chatbots for advice on their money.
In a new review published on Monday, the watchdog said AI will become “a defining force” in retail financial services, transforming how consumers make financial decisions, how firms operate and how markets function over the next decade.
The report recommends expanding the FCA’s regulatory perimeter, increasing oversight of autonomous AI models and building a public-interest AI financial guidance service as the technology moves further into mainstream finance.
It comes as AI adoption accelerates well beyond the industry’s early expectations. The FCA found around 11 million UK adults would be willing to let AI make financial decisions within agreed parameters, while nearly a third would consider using the technology for pensions and investments.
Separate research from financial comparison site Finder suggests 40 per cent of Britons have already used AI for some form of financial advice, underscoring just how quickly large language models like ChatGPT or Gemini are becoming part of everyday money management.
Sheldon Mills, the FCA executive director who led the review, said: “Artificial intelligence will transform financial services by 2030. It creates significant opportunities for consumers, firms and the wider economy.”
‘AI is influencing financial decisions’
George Sweeney, investing expert at Finder, told City PM the pace of adoption reflected a market where millions remain priced out of traditional financial advice.
“AI offers an accessible, affordable alternative,” he said. But he argued regulators should avoid trying to “rein in a rapidly advancing global technology” and instead focus on improving regulated advice and targeted support for consumers.
The review concludes AI could widen access to financial guidance, lower costs and improve personalisation, but warns those gains could be matched by greater risks around fraud, cyber attacks, consumer harm and market concentration.
Industry leaders broadly backed the FCA’s call for clearer guardrails, arguing confidence in AI will ultimately depend on trust rather than capability alone.
Brian Byrnes, head of personal finance at Moneybox, said AI had the potential to make high-quality financial guidance more accessible but warned regulation must keep pace.
“If AI is influencing financial decisions, it should be held to the same high standards and consumer protections as any other regulated financial services provider,” he said.
Research from The Payments Association found 58 per cent of UK online merchants believe AI agents have already completed transactions on their platforms, despite fewer than half saying they are confident in the liability rules governing those purchases.
Its chief executive, Emma Banymandhub, said the FCA’s review showed firms should now treat agentic AI as “an accountability and governance issue” rather than simply another wave of technological innovation.