UK FCA seeks stronger oversight of AI models used in finance

The UK Financial Conduct Authority’s Mills Review now sets out a broader vision for how AI could reshape retail financial services, describing a shift from human-led, episodic decisions to continuous, delegated services run by increasingly autonomous agents. The 147-page report, led by executive director Sheldon Mills, outlines seven recommendations including support for “the foundations for agentic finance” through trusted agent protocols and an expanded FCA AI Lab. The review adds operational context to the regulator’s earlier accountability debate by arguing that advanced AI systems will need financial rails that can settle transactions instantly and programmatically. That raises the potential role of systemic stablecoins, tokenized bank deposits and tokenized assets as settlement infrastructure for AI-driven portfolio and cash management, particularly where traditional multi-day payment and settlement processes are too slow for machine-executed strategies. The report also sharpens governance concerns as firms move from AI systems that recommend actions to ones empowered to take them. FCA research cited in the review shows 20% of UK adults are already open to letting AI make autonomous financial choices. Mills said managers would still need to remain accountable for AI behavior, while industry participants warned that legal responsibility and consumer trust could become more difficult to maintain as humans move toward the observer end of the AI “autonomy spectrum.”