The aim of the review, led by FCA executive director Sheldon Mills, is to set out how AI could reshape retail financial services for consumers, firms, markets and regulators by 2030 and beyond.
The report identifies four 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.
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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.
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.”
Mills Review: Seven key recommendations
- 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.
Industry reaction
Jonathan Herbst, Global Head of Financial Services, Norton Rose Fulbright
The report shines a light on a fundamental regulatory question – if consumers increasingly rely on AI systems provided by a small number of major technology companies to make financial decisions, how should existing regulatory frameworks adapt?
Mills is not proposing an immediate crackdown on Big Tech, but he is asking whether the rules need to evolve to reflect how financial services are actually being delivered. That’s a big question for policymakers and one that will only become more pressing as AI adoption accelerates.
Matthew Gregory, Partner, Norton Rose Fulbright
The seven recommendations in the Mills Review will shape the evolution of the regulatory framework for retail financial services at pace.
Mapped against an AI autonomy spectrum, the report identifies a series of pressure points in the current regulatory framework, with operational resilience and the regulatory perimeter suffering pressure points in the near term. As a result, the report calls for the FCA to consider undertaking an urgent review to secure and adapt the regulatory perimeter, to consider greater coordination between authorities and to lay the foundations for agentic finance – effectively building the structures to ensure that the regulatory framework remains fit for purpose as agentic models advance.
What all of this means is that we can expect a substantial new phase of work to be undertaken by the FCA, with potentially significant implications for the landscape of all retail financial services in the months and years ahead. The report identifies significant shifts in market dynamics towards new forms of AI-mediated retail financial services.
As the FCA identified in its recent technology horizon scan, personalised intelligence and programmable finance could radically change the ways firms design, distribute and deliver products and services – and consumers’ own use of advanced models will change how markets function as a whole. Acknowledging the transformative potential of the AI autonomy spectrum for consumers, the report is clear-sighted on the significant risks they pose and there are calls for some significant developments to the financial services framework to address them.
The report identifies five areas in which the current regulatory framework is likely to suffer stress as firms move across the AI autonomy spectrum. Operational resilience and the regulatory perimeter stand out as more likely to suffer stress in the nearer term. The SMCR and Consumer Duty are also highlighted as being under stress, in circumstances where the relationship between humans and AI systems moves towards humans as observers – where AI acts within boundaries which are monitored by humans.
Stepping back, it is clear that firms are no longer masters of their own destiny in connection with their response to the rise of AI systems. Changing consumer use, the evolving role of the consumer in conjunction with their AI agents, and the increasing deployment of AI systems by other firms and within system infrastructure means that firms must adapt their governance models now.
As well as setting out a call to action for the FCA, the report challenges firms to reconsider the necessary make-up of internal skills, experience and expertise to respond effectively to this changing world. There are numerous insights for firms grappling now with questions of accountability, oversight and liability when ‘things go wrong’.
Steve Round, Co-Founder and President, SaaScada
Trying to build AI on ancient legacy foundations is like racing an Aston Martin over cobblestones. It’s going to be a bumpy ride. If banks are serious about getting ahead with AI, they need data and core systems that are fit for purpose. Otherwise, all the ambition in the world won’t translate into results.
Paul Payne, CTO, SaaScada
Banks can’t expect to innovate with agentic AI if they are still mired in manual processes. The priority has to be maturing the infrastructure and driving automation first. Only then can banks layer in AI and start to see real operational gains.
Emma Banymandhub, CEO, The Payments Association
Consumers may be increasingly comfortable using AI agents for routine tasks such as weekly shopping, but AI-driven savings and investment decisions present a very different set of challenges. While AI can increasingly explain investment concepts and analyse financial information, personalised investment recommendations remain subject to important regulatory constraints.
The Payments Association’s recent research, Agentic commerce in UK retail: An unresolved liability question, found that merchant adoption of AI-led purchasing is accelerating faster than the liability and authentication frameworks needed to support it. We found that 58 per cent of UK online merchants believe AI agents have already transacted on their platforms, yet only 41 per cent are confident in the liability frameworks governing those transactions.
The FCA’s Mills Review reinforces that firms should treat agentic AI as an accountability and governance issue now, while providing greater confidence to innovate responsibly as AI adoption accelerates. AI has enormous potential for financial services, but realising that potential will depend on strong governance, clear accountability and maintaining consumer trust.
Bharat Mistry, Field CTO, TrendAI
UK financial services firms are not yet equipped to handle the fraud risks that AI is enabling, and the gap is widening. Most fraud controls were built to catch a human pretending to be someone else, not a machine generating a flawless fake of them. Voice callbacks, ‘liveness’ video checks and one-off ID document checks are all controls that generative AI can now beat convincingly, yet too many firms still treat them as gold-standard.
Synthetic identity fraud is the sleeper threat the FCA’s review doesn’t fully reckon with. Instead of stealing one real person’s identity, fraudsters blend real and fake details – a genuine National Insurance number paired with a made-up name, say – and AI makes the fake supporting documents and history far easier to produce convincingly. This isn’t a commoditised, ‘solved’ risk yet. It’s roughly where account takeover fraud stood a decade ago, before shared industry detection matured it into a manageable problem. Until firms start sharing fraud signals and stress-testing their AI against AI, the fraudsters have the upper hand.
The report is honest in that regulators simply can’t move as fast as AI is changing. Which means it’s on the firms themselves to build in safety and honesty from day one, not add it in later once something’s gone wrong. In practice, this would require testing AI systems deliberately to see how they could be tricked or misused, also having someone senior who’s actually accountable when an AI makes a bad call rather than shrugging and blaming “the algorithm,” and being able to explain how and why an AI reached a decision. Firms that are already thinking about building that scaffold of trust around AI will be the firms that stay on the right side of developing rules and avoid becoming a cautionary tale of falling victim to AI-enabled fraud.
OpenPayd spokesperson
It’s positive to see the FCA’s continued efforts to update and upgrade the UK’s financial system. With AI reshaping payments technology, security and consumer behaviour, Mill’s review is an important step in bringing the UK’s financial infrastructure in line with a changing world.
Agentic payments in particular are poised to reshape how consumers manage funds and interact with global payment infrastructure. Much of the responsibility for getting this right will sit with infrastructure providers: the controls that keep consumers safe (identity, authorisation and fraud detection) are built at the infrastructure layer, and so is the capacity to bring innovation to market quickly and responsibly. The review should recognise that role, and any future changes should be guided by principles of fair competition, enabling banks, fintechs, payment providers and digital asset businesses to innovate alongside one another.
