FCA launches Mills review on AI future
FCA Launches Mills Review on AI Future
On 27 January 2026, the Financial Conduct Authority (FCA) launched the Mills Review to explore the long-term impact of artificial intelligence (AI) on UK retail financial services, inviting industry and stakeholder input on how AI could reshape the sector by 2030 and beyond.
The review, led by Sheldon Mills, seeks feedback across four key themes:
Future evolution of AI technology – including autonomous, agentic and multimodal AI systems, and how firms expect to use them.
Impact on markets and firms – potential shifts in competition, market structure, customer relationships and whether new AI-driven services fall inside or outside existing regulatory perimeters.
Consumer trends – how consumers may interact differently with financial services through increasingly personalised AI interfaces, alongside the risks of opaque outcomes, bias or unregulated advice.
Regulatory approach – whether existing frameworks like the Consumer Duty and Senior Managers and Certification Regime (SMCR) are suitable for future AI deployments, and how regulators might adapt to support innovation while protecting consumers.
The consultation period closed on 24 February 2026, with Mills expected to present recommendations to the FCA board in summer 2026, followed by a wider publication to encourage informed debate on AI’s role in financial services.
For regulated firms, the Mills Review is a clear signal that AI use will come under sharper supervisory focus, even where existing rules already apply. As AI becomes embedded in credit decisions, fraud controls, customer interactions and automated outcomes, firms will need to be able to evidence governance, accountability and ongoing oversight—not just technical capability.
Watchdog Services can support clients by mapping AI use cases to regulatory obligations, stress-testing accountability under SMCR, monitoring model risk and drift, and helping firms demonstrate that AI-driven decisions continue to deliver fair, explainable and compliant consumer outcomes. In practical terms, this means giving boards and compliance teams early visibility of emerging risks, clear audit trails, and confidence that AI deployment aligns with both current FCA expectations and the direction of future regulation.