The Financial Conduct Authority (FCA) is adapting its regulatory approach to keep pace with the rapid advancements in artificial intelligence. Acknowledging the accelerating changes, the FCA is exploring a more dynamic relationship between regulators and the firms they regulate. The FCA aims to support innovation while safeguarding consumers and market integrity.
The FCA is focused on utilising existing frameworks, including the Senior Managers Regime and Consumer Duty, to mitigate AI-related risks. They are also using AI to improve their own processes. The FCA is using AI methods for firm segmentation, monitoring of portfolios, and to identify risky behaviours. The FCA is also experimenting with large language models to make processes more efficient for authorisations and supervision.
While not planning to introduce additional AI-specific regulations, the FCA is open to collaborating with firms wanting to test the latest innovations. They are also working with fellow regulators and the international community to share information. The FCA emphasises accountability for senior managers in the safe use of AI.
