Industry reacts as FCA publishes Mills Review into impact of AI on retail financial services

The FCA says that its review sets out how AI could reshape retail financial services for consumers, firms, markets and regulators by 2030 and beyond.

The full statement from the FCA is reproduced below, plus various reactions to the news from industry experts too.

Led by FCA executive director Sheldon Mills and commissioned by the Board, The Mills Review is the first work of its kind initiated by a regulator globally.

Drawing on views from across the financial services landscape, the report identifies 4 major AI‑driven shifts likely to impact 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.

The report finds there is already consumer appetite for the use of agentic AI in personal finance, with research commissioned by the FCA showing that a fifth of people – equivalent to 11 million UK adults – are likely to use AI that can act autonomously within pre-set goals. But consumers in the survey are concerned about trust and control of AI.

The Review concludes that AI is likely to become a defining force in retail financial services, transforming how firms operate, how consumers make financial decisions and how markets function. While AI has the potential to improve access, personalisation and efficiency, it could also amplify risks associated with fraud, cyber security, consumer harm and market concentration.

Executive director Sheldon Mills said: ‘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.’

Key recommendations

The Mills Review also outlines 7 recommendations for the FCA Board and Executive to consider, which are as follows:

Secure and adapt the regulatory perimeter.
Strengthen system-wide coordination and oversight.
Monitor the transition to autonomous models and adapt regulatory frameworks.
Scale up the FCA’s AI Lab to support AI models and system innovation in financial services.
Enable the foundations for agentic finance.
Build and adopt an AI-enabled agentic supervisory model.
Develop a trusted public-interest AI-enabled financial capability service.

FCA response

Ashley Alder, Chair of the FCA, said: ‘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 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 regulator, more efficient and effective.’

Marianna Hunt, Personal Finance Specialist, Fidelity International, commented:

“The way people seek information about their finances is evolving at remarkable speed. The rise of AI tools – particularly among younger investors – is changing how people research, plan and make decisions about their financial futures.

“At the same time, we know there is a clear advice gap in the UK – compounded further by the challenges many face in navigating the financial planning landscape, with complex rules and regulations to consider. Many people are trying to equip themselves with the knowledge to make good financial decisions, but the quality and reliability of online information varies widely. Some of these sources are authorised and trustworthy, but others are not, which creates a real risk of misunderstanding and poor outcomes.

“This is exactly why it is so important that financial institutions are empowered to do more to support consumers. Measures such as the FCA’s new Targeted Support regime will enable providers to offer clearer nudges and guidance at key moments, helping people make better long term decisions and avoid harmful actions or inactions. Consumers must have access to consistent, scalable and trusted support. By combining high quality guidance with the right regulatory framework, we can help to ensure that people feel confident and informed – whether they are using traditional advice channels or exploring new digital tools.”

David Brooks, Head of Policy at leading independent financial services consultancy Broadstone, commented:

“Pensions are complex, long-term financial arrangements where mistakes can have lasting consequences. While AI has a role to play in improving engagement and understanding, consumers need to treat it as a starting point, not a substitute for professional guidance, scheme information or regulated advice.

“As AI becomes more widely used, improving public understanding of its limitations will be just as important as improving the technology itself. Trust should be earned through accuracy and accountability, not assumed because an answer sounds convincing.

“One of the FCA’s biggest challenges may be protecting consumers from bad pension decisions driven by good-looking AI answers. Generative AI is excellent at sounding authoritative, but not always at being right. When retirement savings are involved, people need to understand that convenience is not the same thing as reliability.”

Sam Christopher, proposition director at Quilter comments:

“As The Mills Review into AI and financial services shows, AI is already part of the way people engage with their finances on a weekly basis. With the technology becoming more sophisticated at a rapid pace, its influence is only likely to grow, as our research with more than 2,000 UK adults, conducted with Boring Money,* also highlights. While consumers do not yet trust AI to the same extent as traditional financial sources, they already view it as more trustworthy than friends or finfluencers. Given we know many financial decisions are influenced by informal sources, this points to AI playing an increasingly important role in shaping consumer behaviour.

“What is particularly striking is the generational divide. Our research shows, nearly nine in ten under-45s say they are comfortable using AI to support financial decision making, which suggests trust and adoption are likely to increase as younger cohorts build wealth and become more active investors.

“Today, consumers are most comfortable using AI for educational and guidance-based purposes rather than for personalised recommendations. Our research found that 42% of savers and investors would be comfortable using AI to explain financial concepts, compared with 24% who would be comfortable receiving investment recommendations from it. This shows consumers currently see AI primarily as a tool to improve understanding and confidence, rather than replace professional advice. However, as The Mills Review points out, agentic AI is likely to develop and be adopted in far greater numbers than it is today, it creates the potential for far greater automation for consumers, as well as more personalised recommendations.

“As such, there is also a clear opportunity for financial services firms to play a leading role. Nearly half of consumers say they would trust AI more for financial decision-making if the accuracy of the information was guaranteed by a regulated financial provider. Indeed, Mills calls out the fact that hyper-personalisation from AI could enable bias or lack transparency. That underlines the importance of accountability and oversight as firms continue to develop AI-enabled services. Understandably, regulation and governance are going to play a crucial factor here in order to maintain consumer trust and confidence.

“AI has the potential to deliver significant benefits across financial services through greater efficiency, lower costs and improved customer experiences. It could also help the industry better serve those who have historically struggled to access affordable support because of the advice gap. However, customer needs must remain at the heart of adoption. Firms and regulators should work together to create an environment where innovation can flourish, while ensuring consumers remain protected from the risks of inaccurate information, bias and misuse.”

Brian Byrnes, Director of Personal Finance at 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.

“However, as the technology becomes more capable, the regulatory framework must evolve alongside it. 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. Innovation and consumer protection shouldn’t be competing priorities—they need to go hand in hand.

“AI will become an increasingly important part of how people manage their money and plan for the future, but trust will ultimately determine its success. The greatest opportunity lies in combining AI’s speed, efficiency and ability to personalise information with the expertise, oversight and accountability of regulated financial firms. Getting that balance right will allow the UK to lead the world in AI-enabled financial services while giving consumers the confidence to embrace the technology.”