FCA issues Mills Review warning AI will reshape retail finance

The Financial Conduct Authority published The Mills Review in July 2026. The review, led by FCA director Sheldon Mills, sets out how artificial intelligence is likely to change UK retail financial services between now and 2030.

It predicts more personalised and efficient customer services, wider use of AI decision tools and new forms of automated commerce and trading. The review maps likely shifts over the next four years and forecasts increasing use of systems that can act autonomously within preset goals.

FCA research cited in the report estimates about one in five UK adults — around 11 million people — are likely to use autonomous AI agents. The review also records widespread consumer concerns about trust and control when systems make or recommend financial decisions.

The report warns of specific risks: more sophisticated fraud, higher incidence of cyber incidents, growing consumer harm and market concentration where a small number of firms control major AI systems.

Mills wrote: “AI will transform financial services by 2030. It creates significant opportunities for consumers, firms and the wider economy.” The review sets out recommendations intended as a roadmap for regulators, government and industry to manage benefits and reduce harms.

Recommendations call for coordinated action across regulators and government to set standards on model testing, transparency, data governance and consumer protection, and to ensure smaller firms are not disadvantaged.

Firms are urged to be clear with customers about AI use, to keep human oversight where appropriate and to strengthen cyber defences. Regulators are advised to improve technical capabilities, run supervised testing environments and expand pilots that let firms trial AI under oversight.

The FCA has already run pilot schemes for firm testing and uses AI tools in its own supervision, activities the review frames as foundations for broader regulatory work.

Earlier this year, the Treasury Committee criticised the regulatory approach as too passive and warned it exposed the public and the financial system to potential harm.

Ashley Alder, chair of the FCA, described the report as highlighting how consumers and firms can gain benefits and how risks can be managed. At the ECB’s Sintra Forum, Bank of England deputy governor Sarah Breeden said examples such as agentic commerce and algorithmic trading show existing, technology-agnostic frameworks may not be sufficient and noted the Bank is exploring so-called “kill switches” that could halt trading if AI models behave unexpectedly.