The Financial Conduct Authority (FCA) is accelerating its use of artificial intelligence to strengthen its oversight, as evidence grows that consumers are increasingly relying on AI tools to make financial product choices.
In its 2026/27 work plan published today (26 March), the regulator set out plans to embed AI across its operations, including speeding up approvals, using generated AI to review company submissions, and improving how data analysis identifies potential harms.
“We are accelerating our ambition to become a smarter, data-driven regulator, helping businesses identify risks faster, make faster decisions and reduce unnecessary burdens on businesses,” said Nikhil Rati, CEO.
The move comes as industry experts warn that AI tools risk being interpreted as recommendation engines rather than summaries of existing online content, which could influence financial decisions without reflecting the latest market trends.
The regulator itself, in its latest Boundaries report, identified the increasing use of general-purpose AI in guidance on borrowing, saving and investing as a new risk.
Alongside its focus on AI, the FCA continues to put pressure on firms to tighten financial crime regulations.
Advisors embrace general-purpose AI tools despite security concerns
Rory Doyle, head of financial crime policy at Fenergo, said regulators were taking an increasingly aggressive approach to anti-money laundering and “know your customer” requirements.
He said: “The risk of financial crime remains significant across the financial system and regulators are focused on ensuring that businesses have effective safeguards in place.”
“Since 2021, the FCA has imposed 13 fines on banks totaling more than £300m for AML system failures. The impact of getting this wrong goes beyond financial penalties, often leading to costly remediation, increased oversight and lasting reputational damage.”
“For businesses, the message is clear: outdated or fragmented financial crime systems leave financial institutions exposed to regulatory action and operational risk.”
The FCA has also launched a consultation on fees and levies, proposing a 1% increase across minimum fees, flat fees and application fees.
This corresponds to a 0.7% rise in annual funding needs, the slowest growth in a decade and below the rate of inflation.
The regulator said it has identified efficiencies that will keep headcount flat and limit cost pressures on businesses despite continued investment in data and digital capabilities.
In its Boundaries report, the FCA highlighted several emerging risks outside the scope of regulation, including the growing use of AI in financial decision-making, the role of ‘Annex 1’ companies, which are only subject to anti-money laundering rules, and the growth of speculative prediction markets.
It also called for legislative reforms in 15 areas to strengthen consumer protection and support market integrity, including stronger rules on financial facilitation, fiduciary oversight and payment regulation.
