LONDON: A cross-party group of MPs in Britain urged regulators to move away from a “wait and see” strategy and take action to prevent artificial intelligence damaging consumers or destabilizing markets.
In a study on AI in financial services, the Treasury Committee recommended that the Financial Conduct Authority and the Bank of England conduct AI-specific stress tests to help firms prepare for market shocks caused by automated systems.
The committee requested that the FCA provide clear guidelines on how consumer protection standards apply to AI by the end of 2026. They also emphasized the need of senior management understanding the systems they oversee.
The FCA warned Reuters late last year that banks’ rush to embrace agentic AI, which can make autonomous choices, poses new risks for retail clients. Around 75% of UK financial organizations now utilize AI. Companies are using technology for key activities including processing insurance claims and credit assessments.
While the paper recognized the benefits of AI, it also warned that the technology posed “significant risks,” including opaque credit judgments, the possible exclusion of vulnerable people through algorithmic customization, fraud, and the proliferation of unregulated financial advice via AI chatbots.
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