Economy July 6, 2026 06:50 AM

FCA Calls for Review of Rules Governing General-Purpose AI in Financial Advice

Regulator flags consumer reliance on ChatGPT, Claude and Gemini and urges quick assessment of whether to widen regulatory perimeter

By Nina Shah
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The UK Financial Conduct Authority has recommended a review to determine whether large language models and other general-purpose AI systems should fall inside financial regulation, citing growing consumer trust in these tools and the concentration of reliance on a few technology providers that could create system-wide vulnerabilities.

FCA Calls for Review of Rules Governing General-Purpose AI in Financial Advice
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Key Points

  • The FCA recommends reviewing whether general-purpose large language models should be included within the financial regulatory perimeter.
  • Survey data in the FCA review found that more than a quarter of UK consumers trust ChatGPT, Claude and Gemini for financial advice.
  • 81% of financial firms globally are adopting AI at some level; 40% report advanced stages of scaling or transformation, with UK firms moving AI into customer-facing roles such as complaints handling and investment guidance.

The Financial Conduct Authority (FCA) said on Monday that the regulatory framework for financial services should be examined to determine whether general-purpose large language models - such as ChatGPT, Claude and Gemini - ought to be brought within its remit, given their expanding role in consumer financial decision-making.

Regulatory concern and next steps

FCA Executive Director Sheldon Mills warned that the current rulebook will need adjustment as more financial firms come to depend on a concentrated set of technology providers. That reliance, he said, could translate into risks that affect the broader financial system.

The FCA's review found that more than a quarter of UK consumers place trust in tools like OpenAI's ChatGPT, Anthropic's Claude and Alphabet's Gemini for financial advice. The regulator also identified a gap in consumer awareness - users often do not realize that the protections afforded to regulated financial services do not extend to these AI-driven services.

Mills urged that the FCA consider, within a three to six month window, whether to formally reassess and potentially expand the regulatory perimeter to include general-purpose models that currently sit outside regulatory oversight.

Chair's comment

FCA Chair Ashley Alder emphasized the need for regulatory approaches to keep pace with rapid technological change, saying: "We need to keep pace with a rapidly changing environment and the principles-based, outcomes focussed approach we’ve taken on AI."

Adoption across the industry

The FCA pointed to a recent survey showing 81% of financial firms worldwide are using AI in some capacity, and that 40% of firms reported they were at more advanced stages of scaling or transformation. While AI use remains concentrated in back-office functions for many institutions, British firms are increasingly deploying AI in customer-facing roles, including handling complaints and offering investment guidance.

Systemic risks from concentration

The review raised a specific warning about the potential for widespread AI use to produce dependencies on a limited number of technology providers. If multiple firms rely on the same models, cloud services or technology infrastructure, the FCA said this could lead to correlated behaviours and shared points of failure across the financial system.


This review signals a potential shift in regulatory thinking about where the boundary should lie between regulated financial services and general-purpose AI tools that consumers increasingly use for financial decisions.

Risks

  • Concentration risk: financial firms' reliance on a small number of technology providers may create common points of failure affecting critical operations - impacting banks, insurers and other financial institutions.
  • Consumer protection gap: many users are unaware that the safeguards applying to regulated financial services do not extend to general-purpose AI tools used for financial advice - affecting retail consumers and wealth management services.
  • Operational correlation: shared use of identical models or cloud infrastructure could lead to correlated behaviour across institutions, raising systemic vulnerability for markets and payments systems.

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