The UK government has published a policy agenda aimed at increasing the use of artificial intelligence in financial services, while seeking to keep regulatory and systemic risks in check.
The proposals draw on measures already introduced by regulators, including the Financial Conduct Authority’s AI Lab, which includes AI Live Testing and the Supercharged Sandbox.
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They also refer to the AI Input Zone, which has gathered examples of strong and weak practice ahead of an FCA paper due later this year.
The package is split into short-term actions, longer-term enablers and resilience measures.
A central theme is the need for clearer guidance for firms adopting AI tools and systems.
On regulation, the paper calls for closer coordination between authorities so firms can better understand what is expected of them.
One of the main proposals is for the FCA to examine the effects of financial guidance and advice-style responses produced by general purpose large language models.
That review would look at consumer outcomes, possible risks of harm, and competition concerns.
Its conclusions would feed into HM Treasury’s work on the regulatory boundary and whether added consumer protections, such as disclosures or public education, are required.
The paper urges firms to consider a shared, voluntary form of wording that would help consumers distinguish between regulated and unregulated AI-enabled financial guidance and advice-like services.
In the area of resilience, the government and regulators are asked to move more quickly on the Critical Third-Party regime, including scrutiny of significant AI and cloud providers.
Alongside that, the industry is encouraged to explore a voluntary assurance framework for third-party AI systems and models used by financial firms.
Commission are asked to encourage wider take-up of the Financial Services Skills Compact and examine the case for an AI skills plan covering senior leadership, technical specialists and frontline staff.
The paper also calls for practical changes to visa rules to make it easier for UK financial firms to recruit overseas AI specialists.
On payments, the proposals say an upcoming HM Treasury consultation should be used to create a framework for agentic payments. That framework would need to cover liability rules, identity checks for autonomous agents, and technical standards for authentication and governance.
The paper also raises broader questions around AI sovereignty and resilience, including closer work between industry and academia, clearer policy on domestic and overseas AI infrastructure, and a cross-sector taskforce to assess risks affecting finance and other critical industries.
