AI is moving faster than the law
The FCA’s Chief Executive, Nikhil Rathi, has warned that AI is moving faster than the law.
That matters because this is not a general technology debate. It is coming directly from the head of the UK financial regulator, in the context of how artificial intelligence may affect financial services, consumers, markets and financial crime.
The immediate issue is whether regulation can keep pace with rapidly developing AI tools. But the wider point is just as important.
Financial services risk is becoming more dynamic.
AI can influence fraud, customer communications, pricing, vulnerability assessments, decision-making, operational resilience and market behaviour. Some of those risks may eventually appear in formal FCA action. Many may not be visible until much later.
For firms, platforms and providers dealing with regulated counterparties, this raises a practical question:
Is it enough to check whether a firm was authorised at the start of a relationship?
Or do we need better ongoing visibility of what changes afterwards?
Permissions, requirements, disciplinary history, Companies House filings, financial stress, director changes, insolvency indicators and public-source information all become more useful when viewed together.
The FCA’s comments on AI are a reminder that regulation is becoming more adaptive, data-led and focused on emerging harm.
At Watchdog Services, this is the area we are focused on: helping firms monitor FCA-regulated counterparties using FCA, Companies House and public-source indicators.
More at: www.watchdogservices.co.uk