FCA review says AI will reshape retail finance by 2030

The Financial Conduct Authority has published a review of artificial intelligence in retail financial services, led by Executive Director Sheldon Mills.

The study examines how AI could reshape consumer finance, firm operations, market dynamics and regulatory oversight by 2030 and beyond. It describes itself as the first review of its kind launched by a regulator and draws on views from across the financial services sector.

The review identifies four shifts likely to shape the market: changes in how firms run their businesses, changes in how consumers make financial decisions, shifts in competition and market power, and higher fraud and cyber risk. It concludes that AI is likely to become a central force in retail financial services, affecting how firms operate, how consumers make decisions and how markets function.

Consumer research commissioned for the review found an existing appetite for more autonomous forms of AI in personal finance. The FCA said a fifth of those surveyed, about 11 million UK adults, would be likely to use AI systems that can act autonomously within pre-set goals.

At the same time, the survey found concerns about trust and control. Those concerns sit alongside the potential for better access to financial products, more tailored services and lower operating costs, as well as the risk of consumer harm, cyber attacks, fraud and greater market concentration.

Key findings

The report argues that AI in retail finance is no longer a distant prospect. Instead, it presents the technology as an increasingly practical tool that could reshape everything from customer support and product recommendations to compliance, supervision and fraud prevention.

Its analysis points to a bigger role for so-called agentic AI, meaning systems able to act with a degree of autonomy within limits set by users or firms. In retail finance, that could include tools that help consumers manage budgets, switch products or carry out financial tasks on their behalf.

The review also highlights risks that may emerge if such systems become embedded across banking, insurance, payments and investments. It raises questions about whether consumers understand what the systems are doing, who is accountable when errors occur, and whether large firms with access to data and computing resources could entrench their market position.

Seven recommendations

The report sets out seven recommendations for the FCA board and executive team. These include securing and adapting the regulatory perimeter, strengthening system-wide coordination and oversight, and monitoring the shift towards autonomous models while updating regulatory frameworks.

Other recommendations include expanding the AI Lab, enabling the foundations for agentic finance, building an AI-enabled supervisory model and developing a public-interest financial capability service supported by AI. Together, they suggest the regulator expects its own approach to supervision to evolve alongside the market it oversees.

Sheldon Mills said the findings were intended to help policymakers and industry prepare for the next phase of change.

"Artificial intelligence will transform financial services by 2030. It creates significant opportunities for consumers, firms and the wider economy. This report sets out a roadmap for how industry, regulators and government can prepare for the next phase of AI-driven change in our world-leading financial services sector," said Sheldon Mills, Executive Director, Financial Conduct Authority.

Board response

The FCA board also signalled support for the broad direction of the review. Ashley Alder, Chair of the FCA, said the report reflected the scale of change that more autonomous AI could bring to the sector and pointed to the regulator's existing principles-based approach.

"The Board is enormously grateful to Sheldon for the rich, comprehensive report he's delivered. His work anticipates the fundamental change agentic AI will bring to financial services. It highlights how consumers and firms can reap significant potential benefits, as well as how risks can be managed. As is clear in the report, we need to keep pace with a rapidly changing environment, and the principles-based, outcomes-focussed approach we've taken on AI - relying on the Consumer Duty and Senior Managers Regime - has been critical to us doing so. The recommendations build on work the FCA has been doing, not least allowing firms to test their use of AI with us, and our own use of AI to be a smarter, more efficient and effective regulator," said Ashley Alder, Chair, Financial Conduct Authority.

The review builds on earlier FCA work on AI, including its discussion paper, AI Sprint and AI Lab. That programme has included live testing with firms and a sandbox initiative intended to let companies test AI use cases under regulatory oversight.

Yonder Consulting conducted the consumer survey behind the report among more than 5,000 UK retail financial services consumers. Participants were defined as people holding a day-to-day bank account, such as a current or savings account. Quotas were used to make the sample representative across factors including age, gender, ethnicity, region, housing tenure and internet ability.

The findings add to a broader debate about how regulators should address AI in consumer-facing sectors without waiting for widespread harm to act. In retail finance, where decisions on credit, savings, insurance, and payments can directly affect household finances, the review argues for earlier scrutiny of systems that may soon move from assisting consumers to acting on their behalf.

Around 20% of consumers in the survey said they would be likely to use an AI capable of acting autonomously within pre-set goals.