The Financial Conduct Authority (FCA) has launched a forward-looking review into how artificial intelligence (AI) might reshape retail financial services by 2030 and beyond. Led by Sheldon Mills, this initiative builds on prior FCA work such as the AI Discussion Paper, AI Sprint and AI Lab and seeks industry input to understand how emerging AI technologies could transform markets, competition and consumer outcomes.
For ARs and consumer credit firms, this isn’t just another regulatory paper; it’s a pivotal moment to think strategically about AI’s integration into your business models and compliance frameworks.
AI’s Growing Role in Financial Services
AI is already embedded throughout financial services used in underwriting, credit scoring, fraud detection and customer service. The FCA’s review highlights that the next phase of AI, including generative and agentic systems, could radically alter how products are designed, distributed and chosen by consumers. These technologies promise significant efficiency gains and enhanced personalisation, but also bring new complexities around explainability, bias and consumer trust.
For consumer credit firms and ARs, this trend matters because credit decisioning tools increasingly rely on complex models. Ensuring these systems deliver fair, transparent and non-discriminatory outcomes will be essential not only for good customer outcomes but to satisfy existing regulatory principles, such as the Consumer Duty.
Competition and Market Dynamics
One of the review’s central themes is how AI may reshape market structure. AI could lower cost-to-serve, enable hyper-personalised product offers and reduce customer inertia by powering intelligent comparison tools. But it could also concentrate power with firms that control rich datasets or advanced AI platforms, potentially creating barriers to entry or unequal competitive dynamics.
For ARs, this means keeping a keen eye on how partnerships with technology providers are structured, how data flows are managed and how reliance on third-party platforms might affect both competitive positioning and regulatory accountability.
Consumer Impact and Regulatory Adaptation
Consumers may benefit from more tailored credit offers, automated financial guidance and streamlined processes. But risks such as opaque decision-making, algorithmic bias and cyber-enabled fraud are also on the FCA’s radar. Firms will need to demonstrate robust governance, maintain auditability of AI systems and ensure human oversight where appropriate.
The FCA isn’t proposing new AI-specific rules; rather, it is testing whether existing frameworks like the Consumer Duty, SM&CR and Operational Resilience remain fit for purpose in an AI-driven world. This reinforces a key message for ARs and credit firms: AI doesn’t sit outside compliance existing duties and regulatory expectations still apply.
Your Role in Shaping the Future
The FCA is actively seeking feedback on four themes: the future evolution of AI, impacts on markets and firms, consumer outcomes, and regulatory approaches. The deadline for responses is Tuesday 24th of February 2026, giving firms a crucial opportunity to contribute practical insight from the front lines. Contributions can be sent to the FCA via email to TheMillsReview@fca.org.uk.
Whether you’re exploring AI for lending decisions, customer engagement or risk modelling, now is the moment to align innovation with regulatory expectations and to help shape how AI’s benefits and risks are understood across UK retail financial services.
