UK regulator warns of "arms race" to keep up with AI use in financial services
4 hours ago
- #Consumer Protection
- #AI Regulation
- #Financial Services
- UK regulators warn of an 'arms race' to keep up with AI use in financial services, as millions rely on it for personal finance decisions.
- FCA executive Sheldon Mills calls for greater powers and a review of AI tools like ChatGPT to ensure they fall under regulatory oversight.
- Report highlights AI's benefits (e.g., hyper-personalization) and risks (e.g., bias, manipulation), urging a review within 3-6 months on unregulated services and consumer harm.
- Research shows 20% of UK adults are open to using unregulated AI for financial decisions, despite lacking compensation recourse if issues arise.
- Firms note AI financial advice may be economically equivalent to regulated services but escapes current rules, creating regulatory gaps.