FCA Launches Mills Review on AI Impact Across Financial Services Sector

There is no doubt that AI and automated systems will have a major impact on banking, insurance and mortgages in future. How new rules are set, how people can appeal decisions, the ground rules of AI credit risk per individual, or company, are all huge challenges. For insurers the new algorithm behind AI quote engines, currently based on outdated factors like postcodes and jobs, will be a potential bone of contention, for activists of all stripes.

We are potentially entering an era of behavioural based risk, curated in real time – but who gets to judge all human behaviours and put a price on them for home, travel or car insurance?

Here’s the word;

The FCA has launched a review into the implications of advanced AI on consumers, retail financial markets and regulators.

The Review will be led by Sheldon Mills and builds on the FCA’s existing work on AI. This includes its AI Discussion Paper, AI Sprint, and AI Lab including AI Live Testing and its groundbreaking Supercharged Sandbox supported by NVIDIA.

AI is already embedded across financial services. Rapid advances in generative, agentic and emerging forms of AI mean the next phase of change could be profound, having the power to reshape markets, change the way firms compete and how consumers use retail financial services.

Sheldon Mills said:

‘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.

‘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.’

The FCA is seeking views on 4 interrelated themes:

1. How AI could evolve in the future, including the development of more autonomous and agentic systems.
2. How these developments could affect markets and firms, including changes to competition and market structure and UK competitiveness.
3. The impact on consumers, including how consumers will be influenced by AI but also influence financial markets through new expectations.
4. How financial regulators may need to evolve to continue ensuring that retail financial markets work well.

While wholesale markets and broader societal impacts are out of scope, the Review recognises that developments in these areas may indirectly influence retail financial services and will be considered where relevant. The FCA is also separately doing extensive work on the impact of AI in wholesale markets, in particular through our live testing partnership.

Feedback will shape a series of recommendations to be reported to the FCA Board in summer 2026, informing how the FCA can guide and respond to AI-driven transformation. This will culminate in an external publication.

The deadline for comments is Tuesday 24 February 2026.

Any other contributions can be sent to us at TheMillsReview@fca.org.uk.

COMMENT;

Richard Pinch, Senior Risk Director at leading independent financial services consultancy Broadstone, commented:

“The FCA’s Mills Review is a clear signal that regulators are looking beyond today’s use of AI and towards its long-term impact on retail financial services, consumer outcomes and financial stability.

“As AI becomes more embedded in customer interactions, decision-making and operational processes, the regulatory focus must by necessity shift to governance and accountability to protect consumer outcomes.

“The challenge across the market will be to demonstrate that AI-driven models and tools align with the ethos of Consumer Duty as they evolve. Those that build strong oversight frameworks now will be better placed to innovate with confidence while meeting the FCA’s expectations.”