Joint BoE and UK FCA report on findings on AI and machine learning in financial services 2026

The Bank of England (BoE) and UK Financial Conduct Authority (FCA) have published a report with the results of their fourth survey on AI and machine learning in UK financial services. The regulators state that the findings should be read as evidence from participating firms rather than a complete assessment of the UK financial sector.

The survey found that AI adoption has continued to increase, with 86% of respondents now using AI and generative AI accounting for 56% of reported AI systems. AI agents are also widely deployed, although most agents were found to operate with limited autonomy. Third-party AI systems have become more prevalent and material, with information security and operational resilience concerns the most prominent reported constraints on their adoption.

More broadly, operational efficiency, automation and productivity were the highest-rated areas of perceived benefit from AI, while data protection and security, third-party and supply chain risk, and generative AI-specific risks were the highest-rated areas of perceived risk. On regulatory constraints, 42% of respondents considered UK data protection and privacy to pose a high compliance burden, and 29% said the same of international regulation.

On governance and accountability, most respondents reported having formal AI governance arrangements, although oversight of third-party AI systems was the most commonly reported area of governance uncertainty or implementation challenge. The survey also considered frontier AI and cyber risk. Most firms expected frontier AI cyber capabilities to become material to their risk profiles, with 88% of respondents assessing evolving frontier AI cyber capabilities as having a moderate or high impact on their firm's risk profile over the next two years.

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