UK Lawmakers Warn AI Boom Outpaces Financial Regulators

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Written by Aaron S.,

Editor-In-Chief

Last Updated: January 20, 2026

Key Takeaways

UK lawmakers warn that AI spreads through finance faster than regulators can respond, which may put consumers and the system at risk;
The Treasury Committee says outdated rules and unclear oversight create gaps in accountability and transparency around AI use;
The committee urges regulators to publish clear AI guidance by 2026 to protect consumers and define responsibility within firms.

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UK Lawmakers Warn AI Boom Outpaces Financial Regulators

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A UK parliamentary committee has raised concerns that artificial intelligence (AI) is spreading through the financial industry faster than regulators can respond.

The Treasury Committee said this could pose serious risks to both consumers and the financial system, especially as firms depend on large technology providers.

In a report published by the House of Commons, the committee noted that the Financial Conduct Authority, the Bank of England, and HM Treasury are relying on outdated rules to address new AI-related challenges.

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It warned that such an approach may not be enough to address issues around accountability, transparency, and decision-making.

The report stated:

By taking a wait-and-see approach to AI in financial services, the three authorities are exposing consumers and the financial system to potentially serious harm.

According to the committee, AI is already part of key financial activities such as lending, risk assessment, and payments. Yet the systems that use it are often complex and difficult to monitor.

The committee agreed that AI can bring clear benefits to customers, such as better products and more efficient services. However, it said that regulators have not given firms enough guidance on how to apply existing rules when using AI tools.

To address this gap, the committee asked the Financial Conduct Authority to publish clear and detailed guidance by the end of 2026.

Meanwhile, the European Union recently investigated Google over possible violations of competition laws linked to its AI search features. What did the Commission say? Read the full story.