Some 86% of regulated firms now use AI, according to a joint AI survey from the FCA and the Bank of England, due to be published next week.
The figure was revealed today by Jessica Rusu, FCA chief data, information and intelligence officer.
Speaking at the Bloomberg UK Policy Series she said: “AI will redefine financial services. Done well, AI can increase productivity, improve competition, services and drive economic growth.”
She said AI can significantly widen access to financial tools and information. “But it can also blur the boundary between regulated and unregulated activity, and the protections consumers receive.”
Ms Rusu noted that four in five less-experienced investors aged 18-40 have used AI to help with investing, but only 40% of consumers correctly recognise that there is no recourse if something goes wrong after acting on advice from a general-purpose AI tool.
She said that as a consequence the FCA is making the existing boundary clearer through InvestSmart and the FCA Firm Checker.
Ms Rusu said warnings may be more effective at the point where AI-generated financial information is delivered. “So we are calling on AI providers to help consumers understand the limits of financial information and advice generated by their models through clear, proportionate and consistent disclaimers.”
The regulator has published good and poor practice drawn from its observations from firm testing this year, to give practical guidance and examples.
It said its seen firms using AI for inclusive product design, clear consumer choice, and a path to speak to a person. In an example of good practice one firm developed a live list of vulnerability signals that its chatbot can use to flag consumers who may need additional support to human advisers.
But the regulator warned of poor practice too: firms developing AI tools without a clearly defined need, excluding vulnerable consumers by default, overstating capabilities, or deploying automated customer journeys without sufficient testing.
Ms Rusu concluded: “AI is moving faster than any regulatory framework was designed. That means regulators will increasingly need to make judgements without precedent, while ensuring that trust remains at the heart of financial services.”