The UK’s financial services sector regulator has announced a review of the potential long-term impacts of advanced artificial intelligence (AI) as the sector faces the prospect of “non-human intelligence surpassing human reasoning”.
The Mills Review, as it is known, will focus on what impact AI could have on consumers, finance firms and regulators in the future.
Its announcement quickly followed a Treasury Committee warning last week that financial regulators’ current approach to AI is exposing the UK public and the country’s financial system “to potential serious harm”.
The MPs criticised regulators and reported that the risks come as a result of the positions adopted by the Bank of England and the Financial Conduct Authority (FCA), which the committee described as a “wait-and-see approach”.
“The major public financial institutions, which are responsible for protecting consumers and maintaining stability in the UK economy, are not doing enough to manage the risks presented by the increased use of AI in the financial services sector,” said the committee of MPs.
The review, which is being carried out by FCA director Sheldon Mills, will focus on the future emerging uses of AI and their potential impacts on the retail financial services sector.
Mills said: “AI is already shaping financial services, but its longer-term effects may be more far-reaching. This review will consider how emerging uses of AI could influence consumers, markets and firms, looking towards 2030 and beyond.
It is entirely plausible that we will see widespread use of agentic AI systems, neuromorphic computing and quantum capability. We may even encounter forms of non-human intelligence surpassing human reasoning. None of this is science fiction Sheldon Mills, FCA
“By taking a forward-looking view, the review will help the FCA continue to support innovation while promoting the safe and trusted adoption of AI in retail financial services.”
The FCA said that while wholesale financial markets and the wider impact on society are out of the review’s remit, it will consider them if they have an indirect impact on retail financial services.
The review will look at the evolution of AI technology, the impact of AI on markets and firms, consumer trends and regulatory approach.
“It is entirely plausible that we will see widespread use of agentic AI systems, neuromorphic computing and quantum capability. We may even encounter forms of non-human intelligence surpassing human reasoning. None of this is science fiction; all of it sits squarely within the range of what could happen in the next decade,” said Mills.
“My purpose is not to claim certainty about the pace or direction of AI development. I want to explore a range of plausible futures and offer clear recommendations to ensure the FCA remains prepared, adaptive and able to support a thriving, innovative UK financial services sector,” he added.
Mills expects to report to the FCA board in the summer and is calling for the views of a wide range of stakeholders, including financial firms, consumer groups, trade associations, technology providers, politicians and academics.
Separately, the government last week appointed senior tech executives from two banks to champion and guide the adoption of AI in the banking sector.
Starling Bank’s CIO, Harriet Rees, and Lloyds Banking Group’s AI boss, Rohit Dhawann, will report to Lucy Rigby MP, the economic secretary to HM Treasury.
But while experts support the appointments, they are also calling for more than just two AI champions in the sector. The government wants the two executives, who are working voluntarily, to support the financial services sector in adopting AI “safely at scale”.
To share your views for The Mills Review, complete this online response form or email [email protected] by Tuesday 24 February.
