Britain’s Financial Conduct Authority (FCA) plans to automate much of its supervision and enforcement using AI.
The FCA plans to become what it calls an “agentic regulator,” and it is doing so without writing any AI-specific rules for the firms it oversees.
How will the FCA become an agentic regulator?
MPs on the Treasury Committee were told at an evidence session on October 13 that Britain’s Financial Conduct Authority will automate much of its supervision and enforcement.
Jessica Rusu, the FCA’s chief data, information and intelligence officer, said the automation of the regulator’s operations is expected to catch harms at the authorization gateway.
Rusu told the committee that AI is already helping case officers read unstructured text and work through intelligence faster across authorization, supervision and enforcement. However, she clarified that a human is still signing off on every decision “for now.”
Committee member John Glen reportedly asked the FCA whether it would adopt the agentic supervision model recommended by the Mills Review, and Rusu replied that the regulator was working towards becoming an “agentic regulator.”
The Mills Review was published in July 2026 and led by the former FCA executive director, Sheldon Mills. The review recommends that the FCA build an AI-enabled agentic supervisory model, arguing that the regulator needs greater powers. It also asked authorities to consider if large language models (LLMs) like ChatGPT, Claude and Gemini should abide by financial rules.
Chief executive Nikhil Rathi stated that one of the first jobs handed to the FCA’s agentic tool was tidying regulatory returns, with the software going back to firms to flag numbers that do not add up.
Rathi said the point is to free up human supervisors’ time to spend on higher-risk cases. However Rathi also told MPs he cannot agree that the FCA needs more powers until it has used its existing authority fully.
He pointed out a change in the Financial Services and Markets Bill 2026 which shifts a Financial Ombudsman Service obligation from “may refer” to “must refer,” which he said “could generate between 1,000 and 3,000 referrals.”
Rusu stated frontier-model developers have been cooperating with the regulator, sharing details of model vulnerabilities and cyber risks that the FCA then passes to financial firms.
Will the FCA implement rules for AI?
The FCA intends to rely on the AI frameworks already in place, especially the Consumer Duty, which is a set of standards requiring firms to deliver good outcomes for retail customers.
In evidence to the Treasury Committee’s January report on AI in financial services, Rusu said with both the Senior Managers and Certification Regime and the Consumer Duty the FCA does not “need to write new rules for AI.” The UK has no AI-specific legislation, and some 75% of UK financial services firms already use the technology.
The Mills Review points out that only 9% of consumers use traditional financial advice, around 900,000 UK adults are unbanked, and roughly £300 billion sits in low-interest accounts. One in five UK adults are open to letting AI make financial decisions for them, while about 26% already trust general-purpose chatbots for financial advice.
Rathi told MPs that it is actively being debated if chatbots which only give general information, rather than advice for a specific person, should be regulated, adding that it’s up to Parliament to decide.
Separately, the FCA’s Palantir contract for financial crime work has ended.
Rusu is due to publish the FCA’s response to frontier AI models the week of October 19, alongside findings from its AI Live Testing program which was announced in April. The second group to go through live trials with technical partner Advai included Barclays, Experian, Lloyds Banking Group’s Scottish Widows and UBS.
Testing concludes by year end, with an evaluation report due in the first quarter of 2027.
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