AI Regulation in Finance: The FCA's Call for Action

The UK's Financial Conduct Authority has been urged to consider regulating AI language models like ChatGPT and Gemini due to their impact on consumer financial decisions. A review highlights AI's growing role, system-wide risks, and the need for evolving regulations as AI technology adoption increases in financial services.

Britain's financial regulator is under pressure to regulate large language models such as ChatGPT, Claude, and Gemini. These models significantly influence consumer financial decisions, prompting concerns about emerging system threats.

The review, commissioned by the Financial Conduct Authority (FCA) and led by Sheldon Mills, discusses companies' reliance on a narrow range of tech providers, introducing potential system risks. Global regulators are increasingly focused on AI's implications, from cyber risks tied to frontier models like Anthropic's Mythos to agentic systems acting autonomously.

With more than a quarter of UK consumers trusting AI for financial advice, awareness about the protection gap is low. Mills stresses the need to adapt regulations for AI models operating outside current boundaries, while industry leaders highlight the urgency for updated rules as AI usage in financial services grows.