As the role of artificial intelligence in the financial sector continues to grow, the U.K.’s Financial Conduct Authority (FCA) is launching a sweeping review to examine how the technology will shape the future of retail financial services.
The regulator’s exploration of the potential implications of advanced AI on investors, retail markets and regulators themselves will be led by Sheldon Mills, executive director, consumers and competition at the FCA.
In particular, the review aims to examine how AI may evolve, including the development of more autonomous and agentic systems; the potential implications for markets and firms, including the impact on competition and market structure; and, how retail investors will be influenced by AI, and how their evolving expectations will impact financial markets.
It will also look at how regulators may need to change to ensure that retail markets continue to work.
“We may be approaching a genuine inflection point in how AI technology interacts with financial services. Advanced, multimodal and agentic AI systems could reshape market dynamics, alter how financial products are designed and distributed, and transform how consumers engage with firms,” the paper said.
In retail markets, AI impacts remain at an early stage, it noted — however, these tools are being rapidly adopted.
“The extent of its adoption will depend on the confidence of both consumers and firms that these technologies can deliver explainability, fairness, resilience and accountability,” it said.
While most investors are currently using AI as an assistant and information source, the paper said, “As consumer trust increases, we can see consumers delegating decisions to autonomous agents that act on their behalf within agreed limits.”
While AI has the potential to enhance consumer outcomes, it can also amplify risks, the FCA noted — including by providing biased, misleading advice that fails investors. The technology may also introduce new risks if decision-making is increasingly delegated to AI agents, which reduces consumer agency and understanding, and may expose investors to unconscious manipulation, it said.
At the same time, the rise of AI could shift market power from financial services firms towards AI firms that increasingly control customer interfaces, own consumer data and design AI agents, the paper noted.
To explore these issues, the FCA is calling for feedback from various stakeholders, including industry firms, consumer groups, tech providers and academics.
The outcome of the review will “shape a series of recommendations” on how the FCA can address AI-driven transformation that will be published in the summer of 2026.
However, the regulator does not plan to introduce AI-specific regulation, it said.
Instead, the FCA said that it will “continue to rely on its existing, principles-based regulatory framework while considering how regulators need to evolve as AI becomes more embedded in financial services.”
“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,” Mills said in a release.
“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,” he added.
The review will not consider implications of AI for wholesale markets, or the broader societal impacts, the FCA said — although, where this leads to effects on retail markets, they may be considered. In the meantime, the regulator is doing separate work on the impact of AI in wholesale markets.
The deadline for feedback on the consultation is Feb. 24.