The Financial Conduct Authority has set out how artificial intelligence could reshape retail financial services by 2030 and beyond, with a review that places AI agents, consumer redress and regulatory accountability at the centre of future policy work.
The Mills Review, led by FCA executive director Sheldon Mills and commissioned by the FCA Board, identifies four major shifts likely to affect retail financial services: the transformation of firm operations, the evolution of consumer journeys, the reshaping of competition and market power, and the amplification of fraud and cyber risks.
Its central message is that financial services are moving from human-led, episodic activity towards services that are AI-enabled, continuous and delegated. The review says AI will operate inside firms, through consumer interfaces, across markets and within regulators, affecting how products are designed, distributed, monitored and governed.
The FCA’s consumer research also suggests appetite is already emerging. The regulator said a fifth of people, equivalent to 11 million UK adults, are likely to use AI that can act autonomously within pre-set goals, although consumers remain concerned about trust and control.
AI moves closer to action
The review uses an AI autonomy spectrum to explain how the role of humans could change as AI becomes more capable.
At one end, AI acts as a tool, helping a consumer or employee understand information or complete a defined task. Further along the spectrum, AI compares options, recommends actions, prepares decisions or initiates activity for approval. At the most autonomous end, AI acts continuously within agreed limits while the human monitors outcomes.
The review links that movement to questions of consent, accountability, record-keeping and redress. When AI helps someone understand product terms, the main risks may involve accuracy and reliance. When AI recommends, prepares or executes a financial action, the questions become harder: who gave consent, who is accountable, what records exist and how can a consumer seek redress?
Matthew Gregory, partner at global law firm Norton Rose Fulbright, said: “Mapped against an AI autonomy spectrum, the report identifies a series of pressure points in the current regulatory framework, with operational resilience and the regulatory perimeter suffering pressure points in the near term.”
He added: “The SMCR and Consumer Duty are also highlighted as being under stress, in circumstances where the relationship between humans and AI systems moves towards humans as observers – where AI acts within boundaries which are monitored by humans.”
Gregory said organisations must now reconsider how they govern AI as consumer behaviour, market infrastructure and third-party systems change around them.
“Stepping back, it is clear that firms are no longer masters of their own destiny in connection with their response to the rise of AI systems,” he said.
The perimeter question
One of the review’s recommendations is that the FCA should consider securing and adapting the regulatory perimeter for AI-mediated retail financial services.
The review recommends that the FCA launches a review within three to six months into the scale, nature and impact of general-purpose large language models outside the perimeter. It says this should examine how consumers use tools for personal financial management across savings, investments, pensions, mortgages and debt management, as well as the implications for competition, innovation, growth and consumer harm.
That is because AI-mediated journeys may not begin on a bank, insurer or investment platform’s own website. The review warns that general-purpose tools such as ChatGPT, Gemini and Claude can shape how consumers interpret information, narrow options and act, even where those tools sit outside traditional financial services regulation.
Jonathan Herbst, global head of financial services at Norton Rose Fulbright, also said: “The report shines a light on a fundamental regulatory question – if consumers increasingly rely on AI systems provided by a small number of major technology companies to make financial decisions, how should existing regulatory frameworks adapt?
“Mills is not proposing an immediate crackdown on Big Tech, but he is asking whether the rules need to evolve to reflect how financial services are actually being delivered. That’s a big question for policymakers and one that will only become more pressing as AI adoption accelerates.”
In the investment sector, John Allan, director of innovation and operations unit and director of Engine at the Investment Association, the trade body for UK investment managers, said: “We welcome the Review’s focus on the critical questions this pace of change raises for the UK’s framework – from how regulation should respond when AI systems perform functions that look and feel like advice or intermediation, to how supervision needs to evolve for a more technologically enhanced financial system.
“As AI increasingly influences the information people use to make financial decisions, rules on disclosure and fairness will need to work throughout these AI-driven journeys as well as on firms’ web page.”
Advice, guidance and redress
The review presents AI as a possible way to address long-running weaknesses in retail financial markets, including the advice gap, low switching, financial exclusion and low financial capability. It says AI could help consumers compare products, manage their finances and access more personalised support.
The review also points to the regulatory questions created by that opportunity. The more useful AI becomes, the harder it may be for consumers to distinguish between general information, guidance, advice and action taken on their behalf.
Sophie Legrand-Green, head of policy for consumer protection and access at The Investing and Saving Alliance (TISA), a financial services membership body, said: “AI could widen access to financial support, but only if consumers can trust the tools in front of them.
“The Mills Review rightly recognises both the opportunity and the risk. As AI becomes more personalised and able to act as agents, with tools increasingly able to make recommendations or take actions on a consumer’s behalf, the financial services industry must step up to ensure protections, accountability and redress keep pace with innovation.”
Legrand-Green added: “Responsible AI adoption means clear rules, robust testing and strong governance. These tools must be tested against real consumer risks, including vulnerability, comprehension, bias and access to redress, before they become embedded in everyday financial decision-making.”
Moneybox framed the issue through access to guidance and advice. Brian Byrnes, director of personal finance at savings and investing app Moneybox, said: “Artificial intelligence has the potential to transform personal finance by making high-quality financial guidance and advice more accessible, reducing costs and helping millions of people make smart financial decisions with greater confidence.”
Byrnes said that access should not come at the expense of consumer protection.
“If AI is influencing financial decisions or providing financial guidance, it should be held to the same high standards and consumer protections as any other provider of regulated financial services,” he said.
Saturn, which provides compliance infrastructure and AI technology for financial advice firms, focused on how AI could be used inside regulated advice businesses. Amal Jolly, its CEO, said: “AI brings new opportunities to close the advice gap, improving the financial lives of millions of adults, but this report shows it also brings risks.”
“To solve this problem, we need to bring the cost to serve high quality financial advice down, so more people can access high quality, regulated advice,” Jolly said. “That’s how AI can truly help people – by providing the right compliance infrastructure in advice businesses so it costs advisers much less to provide advice.”
Agentic commerce brings liability into view
The review’s implications also extend into payments and commerce.
The FCA’s recommendations include enabling the foundations for agentic finance, including the infrastructure needed when AI agents search, compare, select and transact on behalf of consumers.
Emma Banymandhub, CEO of payments industry body The Payments Association, said: “Consumers may be increasingly comfortable using AI agents for routine tasks such as weekly shopping, but AI-driven savings and investment decisions present a very different set of challenges.
“The Payments Association’s recent research, Agentic commerce in UK retail: An unresolved liability question, found that merchant adoption of AI-led purchasing is accelerating faster than the liability and authentication frameworks needed to support it. We found that 58 per cent of UK online merchants believe AI agents have already transacted on their platforms, yet only 41 per cent are confident in the liability frameworks governing those transactions.
“The FCA’s Mills Review reinforces that firms should treat agentic AI as an accountability and governance issue now, while providing greater confidence to innovate responsibly as AI adoption accelerates.”
FCA sets out supervisory response
The review also looks at how supervision may need to adapt as AI becomes more widely used across firms, markets and consumer journeys.
It says shared reliance on similar models, datasets and infrastructure providers could create correlated behaviour, opacity and common points of failure across financial services. It also says regulators will need AI-enabled supervisory capabilities to identify cross-firm patterns, emerging harms and system-wide risks.
One of the review’s seven recommendations is for the FCA to build and adopt an AI-enabled agentic supervisory model. Others include scaling up the FCA’s AI Lab, strengthening system-wide coordination and developing a trusted public-interest AI-enabled financial capability service.
FCA chair Ashley Alder said the regulator needs to “keep pace with a rapidly changing environment”, adding that its principles-based approach to AI has relied on the Consumer Duty and Senior Managers Regime.
The FCA plans to publish an AI good and poor practice publication later this year, following engagement with firms on what is working well, where they face challenges and where further clarity would help.
