UK Probes AI's Future in Finance

The Mills Review, led by the Financial Conduct Authority's (FCA) Executive Director Sheldon Mills, is a forward-looking inquiry into how AI will reshape UK retail financial services by 2030. It focuses on the evolution of AI technology, its impact on market structures and firms, and emerging consumer trends. The review is part of the FCA's broader effort to support responsible innovation while ensuring consumer protection and market integrity. This initiative builds on the FCA's extensive prior work, including its AI Discussion Paper, AI Sprints, and the creation of an AI Lab in 2024 to deepen understanding of these technologies. The FCA has consistently maintained a principles-based, technology-neutral regulatory stance, meaning it does not plan to introduce AI-specific regulations but will rely on existing frameworks like the Consumer Duty. A key focus of the review is the potential shift to more autonomous and "agentic" AI systems capable of independent decision-making. The inquiry questions how existing accountability frameworks, such as the Senior Managers and Certification Regime (SM&CR), will apply when complex decisions are automated. It also explores the competitive landscape, considering whether market power could shift from financial firms to large technology companies providing the underlying AI. The review also comes amid growing parliamentary scrutiny of AI's impact on financial services. A recent Treasury Select Committee report highlighted potential risks such as a lack of transparency in AI-driven credit and insurance decisions, the spread of unregulated financial advice by AI search engines, and the potential for market "herding" behavior driven by algorithms. This UK-centric review mirrors a broader trend across Europe, where public sector bodies are increasingly moving from debating AI ethics to practical deployment. Case studies from countries like Estonia, which uses AI for predictive healthcare models, and Spain, which uses it to detect tax fraud, showcase the potential for government service transformation. However, challenges in AI adoption within the public sector are common, including legacy IT systems, skills gaps, and navigating complex procurement processes. The FCA has a history of collaboration to understand AI's impact, including a partnership with The Alan Turing Institute to examine transparency and explainability in financial AI. This joint work aimed to move beyond general principles to address concrete challenges in high-stakes consumer applications. More recently, the FCA and the Turing Institute have partnered on projects using synthetic data to improve the detection of money laundering. The Mills Review solicited evidence-backed views from a wide range of stakeholders, including financial firms, consumer groups, and technology providers, with a submission deadline of February 24, 2026. Recommendations are expected to be presented to the FCA board in the summer of 2026, followed by an external publication to foster wider debate.