Charlotte Byrne, UK AI Lead at global management and technology consultancy Capco, comments on the FCA’s Mills Review into the long-term impact of AI on retail financial services, which closed on the 24th of February.
“The FCA’s Mills Review comes at a critical time for financial services. AI is already embedded across many firms’ operations, but advances in generative and agentic systems mean we are moving beyond tools that support decisions to systems that can initiate and execute those decisions.
“Building on the FCA’s AI Lab, Supercharged Sandbox and live testing initiatives, the Review signals a pro-innovation, but supervised stance. This balance is essential – an overly cautious approach risks slowing competitiveness, but hesitation could see UK firms falling behind global peers already investing in the right controls and infrastructure.
“In the near term, AI’s impact will remain operational, driving efficiency and improving customer interactions. Over time, however, agentic systems promise to reshape competition and advice more fundamentally, lowering development costs, enabling AI-native entrants and reducing the cost of personalised financial guidance.
“Consumer experience will be one of the most visible areas of change, with services likely to become faster and more personalised, guidance more accessible and delegation to AI tools more common. While this could improve financial inclusion, it also raises questions around bias and over-automation, making transparency and customers’ ability to challenge decisions essential.
“For regulators, supervisory innovation and the use of AI will be unavoidable as AI-enabled activity outpaces traditional oversight. As systems become more autonomous, firms must be able to explain how decisions are reached and ensure accountability is clear. Clear expectations around shared responsibility across the supply chain will be increasingly important.
“As firms start to prepare, the focus should be on embedding governance by design rather than relying only on post-deployment controls, establishing clear accountability across technology and business owners, and developing robust data strategies aligned to both competitiveness and fairness. Firms should also be actively scenario-testing autonomous system failure modes and at focused on developing board level literacy.”
