FCA Urges Expanded Power to Regulate AI Financial Tools

The Financial Conduct Authority (FCA) released the Mills Review on July 6, 2026, a global first examining how artificial intelligence will transform retail financial services by 2030. Led by Executive Director Sheldon Mills, the report warns that the sector is in an "arms race," shifting from human-led activity toward "agent-led journeys" where autonomous AI acts on behalf of consumers.

Research shows approximately 11 million UK adults are open to using autonomous agentic AI, and over 25% of consumers already trust general-purpose models like ChatGPT, Claude, and Gemini for financial advice. Mills warns that these users lack the legal protections afforded by regulated services. He recommends that the FCA determine within three to six months whether to expand its regulatory perimeter to include these models and urged the UK government to grant the regulator direct authority over tech companies and cloud providers.

The review emphasizes critical risks, including "concentration risk" from reliance on a few tech giants and the scaling of fraud via deepfakes. This urgency follows a cybersecurity scare involving Anthropic's Mythos model, which also faced restrictions from the Donald Trump administration. To mitigate these threats, the FCA proposes creating a free, public-interest AI financial capability service to close the advice gap for the 91% of consumers lacking professional guidance.

Parallelly, the Bank of England warned that stretched AI stock valuations could threaten financial stability, noting that a sharp correction in US AI stocks could reduce UK GDP by 2.2 percentage points. Deputy Governor Sarah Breeden noted that existing frameworks were not built for autonomous agents, further supporting the call for bespoke regulation.