Financial AI Operates Outside Regulation, UK's FCA Plans to Expand Oversight to AI Giants like OpenAI and Anthropic

According to Pulse Check Beating monitoring, Sheldon Mills, Executive Director of Strategy and Competition at the Financial Conduct Authority (FCA), warned that as businesses and individuals accelerate the adoption of AI, regulatory agencies are facing an "arms race" to keep up with the pace and scale of AI proliferation in the financial services industry.

The AI Financial Impact Report authored by Mills highlighted that already, a fifth of UK adults are willing to let large models make savings or borrowing decisions on their behalf. This service, while providing a user experience equivalent to regulated traditional financial advice, falls outside regulatory boundaries, leaving users without any financial recourse in case of losses.

The report called for an urgent review of unregulated financial AI risks and proposed expanding legislative authority to enhance supervision over key technology providers such as Anthropic, OpenAI, Amazon, Google, and Microsoft through a "key third-party" mechanism (the specific list is yet to be finalized by the UK government). It also recommended collaboration to launch AI-assisted free public financial literacy and decision-making guidance services.