A review commissioned by the FCA Board is examining how artificial intelligence could transform banking, credit, insurance and financial advice for consumers across the UK — with the regulator clear it does not plan to create a separate AI rulebook.
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What the Mills Review Actually Is
The Financial Conduct Authority has confirmed it does not plan to introduce AI-specific regulations as a result of its newly commissioned Mills Review — a finding that will matter to the roughly 50,000 financial services firms the FCA currently regulates across the UK, including those serving customers in Kent.
On top of that, the review, commissioned by the FCA Board, is examining how advances in artificial intelligence could reshape retail financial services between now and 2030 and beyond. Its scope covers consumers, firms, markets and regulators. Wholesale markets are explicitly out of scope, except where they directly touch retail.
Rather than building a standalone AI regime, the FCA says it intends to rely on frameworks already in place — the Consumer Duty, the Advice-Guidance Boundary reforms, the Senior Managers and Certification Regime (SM&CR), Operational Resilience rules, and the developing Critical Third Parties regime. The Consumer Duty itself has been in force for products open to sale since 31 July 2023, and extended to closed products from 31 July 2024.
Opportunities — and the Risks That Come With Them
The FCA presents AI as capable of delivering faster decisions, more efficient services and what it describes as “hyper-personalisation” of financial products. That could mean more tailored loan offers, sharper insurance pricing and responsive customer service. But the regulator is equally clear that AI can embed or amplify bias, producing systematically worse outcomes for certain groups — a concern that sits directly within the Consumer Duty’s fair-value and customer-support requirements.
There’s a competitive dimension too. Large incumbent firms bring scale, data and resources to AI adoption. Smaller, digitally native firms may be more agile. And both face potential disruption from entirely new “AI native” entrants — as well as from large technology companies that already control consumer interfaces and data, and which could move into retail financial services without currently sitting inside the FCA’s regulatory perimeter.
That last point is where the FCA sounds most cautious. The regulator has warned explicitly that AI could shift market power towards providers who own consumer data and design AI agents, potentially moving parts of the financial services value chain outside its current supervisory reach.
What Industry Bodies Are Saying
The CFA Institute, responding to the Mills Review consultation, broadly supports the FCA’s technology-neutral, outcomes-focused stance. But it has called for clearer, AI-specific guidance on how the Consumer Duty’s outcomes apply to AI-driven retail services — and for explicit expectations on how SM&CR responsibilities extend to firms that rely on third-party AI systems.
At the same time, the CFA Institute has also advocated a tiered governance model: lighter-touch requirements for assistive AI tools, stricter oversight for autonomous, consumer-facing AI systems that make or heavily influence decisions about credit, investment or insurance.
Industry commentary around the review has pointed to a persistent gap between what financial services firms spend on AI and the value they actually realise from it — attributed to regulatory complexity, legacy systems and ongoing questions about explainability and consumer trust. The FCA acknowledges these barriers and frames the Mills Review partly as a way to provide the regulatory clarity that could help unlock that value.
How the FCA Plans to Finish the Work
The review is intended to culminate in an external publication to support informed public and industry debate. The FCA has invited views on AI’s opportunities and risks, how it could reshape competition and the customer relationship, and how existing regulatory frameworks may need to adapt — without committing to what specific changes, if any, will follow.
Meanwhile, the FCA has confirmed it is building on its existing AI-related work, which includes an AI Discussion Paper, an AI Sprint programme and an AI Lab. The Mills Review sits within that broader strategy rather than replacing it.
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Source: @TheFCA
Key Takeaways
- The FCA does not plan to introduce AI-specific regulations; instead, existing frameworks such as the Consumer Duty and SM&CR will govern how AI is used in retail financial services
- The Mills Review warns that AI could shift market power towards technology firms and AI providers that sit outside the FCA’s current regulatory perimeter, potentially disrupting established financial services models
- The CFA Institute and other respondents broadly support the FCA’s approach but are calling for more detailed, AI-specific guidance under current frameworks, chiefly around Consumer Duty outcomes and senior manager accountability for third-party AI systems
What This Means for Kent Residents
For households and businesses across Kent, the Mills Review’s findings will feed into how the FCA expects the firms serving them — local branches of major banks, building societies, insurers and lending platforms — to use AI in areas such as credit scoring, fraud detection and product recommendations. If AI-driven hyper-personalisation becomes standard, Kent consumers could see more tailored financial products, but they may also face risks around algorithmic bias or opaque decision-making if those systems are not properly governed. The Consumer Duty’s requirements around fair value and good customer support apply regardless of whether a decision is made by a person or an algorithm, so consumers who believe they have received a poor outcome from an AI-driven process can still raise a complaint with their provider and, if unresolved, escalate to the Financial Ombudsman Service. Kent-based small businesses that rely on SME lending or business banking should be aware that AI is increasingly embedded in how lenders assess creditworthiness — and that regulatory clarity from the Mills Review, when it is published, may influence how those assessments are explained and challenged.