Mills Review sets out recommendations to the FCA on AI and the future of retail financial services

The UK Financial Conduct Authority (FCA) has published The Mills Review report, based on an independent review led by Sheldon Mills, Executive Director, Consumers and Competition at the FCA, examining the potential impact of AI on retail financial services by 2030 and beyond. The review concludes that AI is likely to drive a transition from human-led financial activity to increasingly AI-enabled and delegated services, with firms embedding AI across a wide range of functions and consumers making greater use of AI tools and agents to manage their finances. The review identifies four key systemic shifts arising from AI adoption: the transformation of AI becoming core to firms; the emergence of AI-led consumer journeys; changes to competition and market power; and the amplification of financial crime and cyber risks.

While it considers the UK's existing outcomes-based regulatory framework, including the consumer duty, senior managers and certification regime and operational resilience requirements, to be broadly fit for purpose, it highlights the need for them to evolve to keep pace with AI developments.

To support the FCA, the review sets out seven priority recommendations for consideration, including:

• Securing and adapting the regulatory perimeter.
• Strengthening system-wide coordination and oversight.
• Monitoring the transition to autonomous models and adapting regulatory frameworks.
• Scaling up the FCA's AI Lab to support AI models and system innovation in financial services.
• Enabling the foundations for agentic finance.
• Building and adopting an AI-enabled agentic supervisory model.
• Developing a trusted public-interest AI-enabled financial capability service.

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