FCA’s Mills Review warns AI will reshape UK retail finance

The Financial Conduct Authority published The Mills Review on July 6, 2026. The review, carried out by FCA director Sheldon Mills, assesses how artificial intelligence could change UK retail financial services by 2030 and warns it may increase fraud, cyber security threats and consumer harm.

Mills maps how AI could alter firm operations, the ways consumers use services and how markets compete between now and 2030. The review was commissioned after the Treasury Committee raised concerns that regulators’ existing approach to AI could expose the public and the financial system to serious harm.

The review sets out four major shifts driven by AI: operational change within firms; wider use of automated and personalised services by consumers; changes in competitive dynamics; and an amplification of fraud and cyber risk. FCA research cited in the report estimates about one in five UK adults, roughly 11 million people, are likely to use AI systems that can act autonomously within pre-set goals. The report also flags public concern about trust and control over such systems.

The Mills Review recommends that regulators update supervisory approaches, expand testing environments and work with firms to stress-test AI systems. It calls for clearer expectations on governance, model validation, data quality and incident response. The FCA has already allowed firms to trial AI tools under regulator oversight and has tested AI internally; the report advises broadening and accelerating those programmes.

Mills wrote: “AI will transform financial services by 2030. It creates significant opportunities for consumers, firms and the wider economy,” and presented a roadmap for industry, regulators and government to prepare for faster adoption of autonomous AI tools in retail finance.

Ashley Alder, chair of the FCA, commented that the review highlights both potential benefits and ways to manage risks, and she noted the recommendations build on FCA work including supervised trials of firm AI use.

Earlier this year the Treasury Committee criticised a perceived “wait-and-see” stance by major regulators and called for more active oversight after rapid private-sector uptake of advanced AI tools.

The Bank of England has explored technical measures such as kill switches that could halt automated trading if AI models behave unpredictably. Deputy governor Sarah Breeden noted at the Sintra Forum that examples of agentic commerce and agentic trading require fresh consideration of whether existing, technology-agnostic regulatory frameworks remain sufficient.

The review urges coordination across financial authorities, government and international partners to address cross-border risks, data governance and systemic vulnerabilities. It recommends stronger incident reporting, clearer consumer protections and support for smaller firms to adopt safe AI practices so risks do not concentrate in a few providers.

The Mills Review consolidates FCA analysis, industry engagement and public research and sets out practical steps for regulators, government and firms as AI use in retail finance increases by 2030.