The UK’s Financial Conduct Authority (FCA) plans to use more AI to check firms and spot risks sooner. FCA leaders set out the plan on 13 October 2026. They spoke to MPs on the Treasury Committee. The goal is to speed up checks, find errors early and help staff focus on serious cases.
How Will the FCA Use AI to Check Firms?
Jessica Rusu, the FCA’s Chief Data, Information and Intelligence Officer, said AI already helps staff read large files and text. It can speed up work on firm approvals, checks and cases. For now, a person still takes part in each decision. The FCA aims to let AI handle more tasks in time.
FCA chief Nikhil Rathi said the watchdog gets about one billion rows of market data each week. It is testing tools that can spot errors in data sent by firms. These tools may soon flag gaps and ask firms to check their data. That could help FCA staff focus on cases with the highest risk.
This plan builds on the Mills Review, issued on 6 July 2026. It made seven recommendations. One called for the FCA to use AI in its checks on firms.
Will the FCA Set New Rules for AI?
Not for now. The FCA says it does not plan to add new rules just for AI. Firms must still meet the rules that apply to them. These include the Consumer Duty, which seeks fair results for clients, and rules that hold senior staff to account.
A firm cannot pass its duties to a chatbot. If it uses AI to deal with clients, it must still check that its service meets the rules that apply.
When Does AI Help Count as Financial Advice?
Rathi also spoke about the line between plain facts and advice. A chatbot that shares basic facts may fall outside the FCA’s remit. A tool that gives personal advice linked to a financial deal may fall within it. What matters is what the service does, not just its use of AI. Rathi said the wider debate is for the Government and Parliament.
What Is the FCA Doing About AI Cyber Risks?
The FCA is also looking at threats to data and systems. Rusu said lessons on flaws in advanced AI tools are shared via cyber security channels. She urged firms to report major AI or tech incidents where FCA rules require it.
The FCA is testing AI with firms such as NatWest, Monzo and Santander. Its second test group has eight firms, one of which is Barclays. Rusu said examples of good and poor AI use are due about a week after the hearing. A wider test report is due in the first quarter of 2027.
What Does This Mean for UK Firms?
Firms under FCA rules should keep clear, correct records. They should check data before they send it in. They should also know how AI is used, who checks its work, and how faults are dealt with. If a firm breaks an existing rule, faster checks could expose the issue sooner. The FCA has not set a new AI audit date or fine in this update.
How Can LANOP Help Businesses Prepare for AI-Driven FCA Oversight?
As the FCA expands its use of AI, businesses need to keep their financial records accurate and up to date.
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Our accountants can help businesses review their financial processes, identify gaps in recordkeeping, and prepare for changes in regulatory oversight.
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