Boost City regulator’s powers to help protect UK consumers from AI, says watchdog
Summary
The UK's Financial Conduct Authority (FCA) recommends giving itself stronger powers to protect consumers from risks linked to artificial intelligence (AI) in financial services. A recent review found AI could improve access to financial advice but might also increase fraud, cyber threats, and consumer harm.Key Facts
- The FCA’s Mills review looked at how AI will change financial services by 2030.
- AI is helping companies shift from human-led services to AI-powered ones for everyday customers.
- AI may make financial advice more accessible, especially for lower-income people.
- Risks include higher fraud, cybersecurity threats, consumer harm, and less competition.
- The FCA wants to use AI itself to better monitor and regulate financial firms.
- Recommendations include expanding the FCA’s powers over AI companies and cloud service providers.
- Around 11 million people in the UK are willing to use AI for financial decisions despite limited regulation.
- The report urges another review within six months to study risks tied to AI in managing personal finances and unregulated companies using AI.
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