FCA Launches Long-Term Review into AI Use in Retail Financial Services, January 2026

On 28 January 2026, the Financial Conduct Authority (FCA) announced a long-term review into the use of artificial intelligence in retail financial services. The FCA delivered the announcement through a speech by a senior official, framing the review as a multi-year programme to assess how AI deployment by regulated firms affects consumer outcomes, firm risk management, and systemic stability. The review is at an early stage; the FCA has not yet issued a call for input, consultation paper, or policy statement. The FCA is conducting the review under its general statutory functions set out in the Financial Services and Markets Act 2000 (FSMA 2000).

The FCA's primary regulatory mandate derives from FSMA 2000, sections 1B–1E, which require the FCA to act to advance its operational objectives: securing appropriate protection for consumers (section 1C), protecting and enhancing the integrity of the UK financial system (section 1D), and promoting effective competition in the interests of consumers (section 1E). The speech also referenced the FCA's cross-sector AI approach, which expects firms to comply with existing principles-based rules in the FCA Handbook—including Principle 6 (treating customers fairly), Principle 11 (relations with regulators), and SYSC 3 (systems and controls)—when deploying AI. No new binding rules were introduced on 28 January 2026.

Retail financial services firms authorised by the FCA—including banks, insurers, investment managers, mortgage lenders, and consumer credit providers—should expect the FCA to seek information about their AI use cases and governance structures as the review progresses. Firms using AI in customer-facing processes, credit decisioning, fraud detection, or advice tools face the highest scrutiny given the FCA's consumer protection objective. Firms should document how existing SYSC governance requirements apply to AI systems and how their AI outputs are tested for fairness and accuracy before deployment. The FCA has indicated it will design the review to accommodate the pace of AI development and may issue discussion papers before any formal consultation.

The review covers retail financial services only. Wholesale markets AI regulation falls under a separate FCA workstream. No deadline for the review's completion or for any subsequent rulemaking has been published. The FCA has not announced whether the review will lead to dedicated AI-specific rules or will instead result in guidance clarifying the application of existing Handbook obligations to AI use cases.

Source: Financial Conduct Authority (FCA), "The FCA's long-term review of AI in retail financial services: designing for the unknown," speech delivered 28 January 2026, available at https://www.fca.org.uk/news/speeches/fca-long-term-review-ai-retail-financial-services-designing-unknown. Confirmed 9 March 2026.

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