FCA to use AI more extensively
The FCA wants AI to help automate financial regulation. What does that mean for the firms it supervises?
The Financial Times reports today that the Financial Conduct Authority is looking to use AI more extensively across authorisation, supervision and enforcement.
Jessica Rusu, the FCAs chief data, information and innovation officer, told MPs that the regulators ambition was to automate wherever we can, enabling earlier identification of harm and intervention at particularly significant development is the use of AI to analyse unstructured information, including documents and other intelligence that traditional data systems struggle to process efficiently.
This points towards a fundamental change in financial regulation: moving beyond periodic reviews and static information towards more continuous, intelligence-led supervision. At Watchdog Services, we are developing complementary capabilities for businesses operating in regulated markets.
Our Risk Radar monitors approximately 57,000 UK companies linked to FCA-authorised firms, combining FCA and Companies House information to identify financial warning indicators and changes in risk classifications.
Bloodhound goes further, using AI-assisted research to examine regulatory decisions, financial information, media coverage and other public evidence, helping compliance teams understand the context behind potential concerns.
The FCA's direction reinforces a principle we believe will become increasingly important: identifying emerging problems early is more valuable than discovering them after the damage has been done. AI will not eliminate the need for human judgement, but it can substantially improve the quality, speed and scale of the information available to decision-makers.