UK's FCA warns of AI "arms race" in financial services, calls for greater regulatory powers

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Regulators are in an “arms race” to keep up with the use of artificial intelligence in financial services, a senior UK official has warned, with millions of people using the technology to help them make personal finance decisions.

Sheldon Mills, an executive director at the Financial Conduct Authority, told the FT the watchdog would need greater powers to stay on top of the rapid growth of AI and urged UK authorities to review whether the use of ChatGPT, Claude, Gemini, and other large language models should be subject to their rules.

Speaking ahead of the publication on Monday of an FCA-commissioned report he has written on the impact of AI in financial services, Mills said regulators in the area would have to embrace AI themselves to keep up with the “speed, pace, and scale of change” the technology is bringing to the sector and to help “monitor, detect, and tackle the risks.”

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