London, Jan 28, 2026, 20:01 GMT
Britain’s Financial Conduct Authority has kicked off the “Mills Review,” with executive director Sheldon Mills at the helm, to examine how advanced AI might transform retail financial services and impact consumers. The FCA set a deadline for responses on Feb. 24 and plans to present recommendations to its board by summer 2026. This initiative builds on earlier efforts like AI Live Testing and the Nvidia-supported “Supercharged Sandbox.” 1
The FCA is racing to stay ahead as a new batch of tools shifts from pilot phase to active use. Firms are testing generative AI — software capable of creating text, images, or code — along with “agentic” systems that operate more independently, sparking concerns around competition and how consumers are affected. 2
Tensions have risen in Westminster. Corporate Adviser noted the review comes after a Treasury Select Committee report that slammed regulators and the government for a lax stance on AI—MPs warned this could expose consumers to risks. 3
The regulator emphasized it has no plans to roll out AI-specific rules. Mills described it as “entirely plausible” that agentic AI, neuromorphic computing—brain-inspired hardware—and quantum tech could become common, alongside digital finance trends like blockchain and tokenisation, where assets are converted into digital tokens. Tom Callaby, a partner at CMS law firm, noted that AI’s use in retail-facing roles has been limited to date, but companies are exploring new applications. 4
The FCA’s engagement paper looks at how AI could transform retail finance by 2030 and beyond, and what regulators might have to change. Mills noted the FCA plans to stick with current outcomes-focused rules, including the Consumer Duty, which mandates firms to ensure good outcomes for retail customers. But the paper also flagged risks like AI-driven fraud, algorithmic bias, and lack of transparency in decision-making. 5
The debate is heating up, with officials’ language growing more pointed. Computer Weekly spotlighted Mills’ caution that “non-human intelligence surpassing human reasoning” could soon be a reality. MPs have slammed the FCA and Bank of England for adopting what they describe as a “wait-and-see” approach. 6
Some advisers back the FCA’s emphasis on governance ahead of AI becoming routine in the market. Richard Pinch, senior risk director at consultancy Broadstone, described the review as a “clear signal” regulators are thinking past current AI applications. He added the market must prove new models comply with the Consumer Duty. 7
The government is moving on multiple fronts. On Jan. 20, HM Treasury named Harriet Rees, chief information officer at Starling Bank, and Rohit Dhawan, head of AI and advanced analytics at Lloyds Banking Group, as “AI Champions” for financial services. They will report to Economic Secretary Lucy Rigby. Rigby said their role is to help firms roll out AI “safely at scale,” ensuring the system remains “secure and resilient.” 8
Still, the timeline could easily slip or be overtaken by events. Mike Barrett, consulting director at the lang cat, pointed out that regulators will struggle to keep pace with AI. He added that a report to the board this summer “doesn’t feel” like the issue is being treated with the seriousness it demands. Another industry expert flagged the risk of consumers treating readily available AI tools as a substitute for genuine “advice.” 9
The FCA has aimed to keep the review narrowly focused but conceded the situation is more complex. FS Tech reported the regulator excludes wholesale markets from the scope, though it will look at them if there’s an indirect impact on retail finance. Separately, it’s conducting live testing partnerships to explore AI’s role in wholesale markets. 10
The review is currently framed as a call for evidence rather than a set of rules. ITIJ reports the FCA aims to present its findings and recommendations to the board by summer 2026, with a public report to follow. The focus: how AI might reshape competition, consumer behaviour, and regulation in UK retail finance. 11
