A senior official at Britain’s Financial Conduct Authority is urging the agency to examine whether widely used AI chatbots should be brought under formal financial regulation, as more consumers turn to these tools for money-related guidance.
Financial Conduct Authority Executive Director Sheldon Mills raised the concern on Monday, noting that the existing regulatory framework will need to be updated as financial firms grow increasingly dependent on a small number of major technology providers — a trend he warned could create system-wide vulnerabilities.
Mills’ assessment of AI’s impact on the financial sector comes at a time when regulators around the world are grappling with a range of AI-related challenges, from cybersecurity and operational risks tied to cutting-edge AI models — including Anthropic’s Mythos — to the complications posed by so-called agentic systems that can operate with minimal human oversight.
Central to his findings is the rising use of general-purpose large language models by everyday consumers. The review revealed that more than one in four UK consumers place their trust in tools such as OpenAI’s ChatGPT, Anthropic’s Claude, and Google’s Gemini when seeking financial advice. Many of those users are reportedly unaware that the consumer protections that apply to regulated financial services do not cover these AI platforms.
OpenAI, Anthropic, and Google did not respond to requests for comment.
Mills recommended that the FCA take action within the next three to six months to evaluate whether it should “secure and adapt” its regulatory boundaries by assessing the reach, nature, and effect of general-purpose AI models that currently fall outside its jurisdiction.
FCA Chair Ashley Alder backed the call for action, stating: “We need to keep pace with a rapidly changing environment and the principles-based, outcomes focussed approach we’ve taken on AI.”
The review also pointed to broader industry trends. A recent survey found that 81% of financial firms worldwide have adopted AI at some level, with 40% already in more advanced phases of scaling or transformation.
While most AI applications in the financial sector are still concentrated in lower-risk back-office operations, British firms are increasingly putting AI to work in customer-facing roles — including managing complaints and offering investment guidance.
Mills also cautioned that if the financial industry continues to rely heavily on AI, firms could end up dependent on a very limited pool of technology providers for critical functions. That shared dependence on the same models, cloud services, or tech infrastructure could lead to similar behavior across firms, create herd-like tendencies, and produce common points of failure throughout the financial system.
