FCA warns AI arms race in finance needs stronger powers

UK financial regulator FCA warns regulators are in an AI arms race to keep up with AI use in financial services, urging expanded powers and a quick review of AI activities outside current rules. The Mills report flags benefits like hyper-personalised finance and risks such as bias, opaque pricing and fraud, and calls for an AI-enabled financial guidance service plus stronger oversight of major AI providers and critical third parties, with accountability on human managers.