Just a quick update for you;
Babar Hayat – Head of Technology at Konexo – responds to the Mills Review and Treasury Committee calling for tougher AI controls across the financial services sector:
“Taken together, the Mills Review and the Treasury Committee’s report in the past week(s) signal a decisive shift: the next phase of AI adoption in financial services is about operational control and technical assurance, not just innovation.
“Many firms are still experimenting and piloting use cases, but regulators are now shifting their focus on how these systems are engineered, tested and governed once they move into live environments.
“The Committee’s concern about systemic risk reflects a very practical challenge: most organisations still struggle to demonstrate how AI models behave under stress, how they degrade when data shifts, or how decisions can be overridden when things go wrong.
“Meeting this bar requires AI‑specific stress testing, continuous performance monitoring and clear ownership across the model lifecycle – from initial development through to deployment and change management.
“In practice, this elevates AI into core resilience and control frameworks. Firms will need defined accountability under SM&CR, documented decision logic, human‑in‑the‑loop controls and incident response processes that treat AI failures with the same rigour as any other critical system.
“As the FCA moves toward clearer guidance by 2026, organisations that invest now in operations, robust governance – including model validation and explainability – will be best positioned to demonstrate that their AI systems can operate safely, predictably and consistently – not just in controlled pilots, but in the real world.”
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