A senior UK official has warned that regulators are in an "arms race" to keep up with the rapid use of artificial intelligence in financial services. Millions of people are now using AI tools to help them make personal finance decisions, and the watchdog says it needs more power to stay on top of the technology.
Sheldon Mills, an executive director at the Financial Conduct Authority (FCA), told the Financial Times that the regulator would need greater powers to keep up with the fast growth of AI. He urged UK authorities to review whether the use of tools like ChatGPT, Claude, Gemini, and other large language models should be subject to their rules.
FCA official warns of AI "arms race" in financial services
According to Financial Times via Threads, Mills said regulators in the area would have to embrace AI themselves to keep up with the "speed, pace, and scale of change" that the technology brings. The warning comes as more consumers turn to AI for help with budgeting, investing, and other financial decisions.
The FCA official made his comments ahead of the publication of an FCA-commissioned report he has written on the impact of AI in financial services. The report is expected to outline the challenges and opportunities that AI presents for both consumers and the financial industry.
Millions using AI for personal finance decisions
The rapid adoption of AI tools like ChatGPT has raised concerns among regulators about consumer protection and market stability. Mills highlighted that millions of people are already using these technologies to make financial choices, which puts pressure on regulators to act quickly.
As reported by FT Finance News on X, the UK regulator's warning underscores the growing challenge of overseeing AI in a sector where speed and accuracy are critical. The FCA is now calling for a review of whether current rules are enough to cover the use of large language models in financial services.
Our Take: Regulators must act fast to protect consumers
The FCA's warning is a clear sign that AI is moving faster than the rules designed to govern it. In our view, the "arms race" metaphor is fitting — regulators are struggling to keep pace with technology that millions already trust with their money. While AI can offer useful guidance, the risks of errors, bias, or misuse are real. The UK government should take Mills' call seriously and give the FCA the tools it needs to protect consumers without stifling innovation. The report due Monday will be a critical step in shaping how AI is managed in financial services going forward.
