The Financial Conduct Authority (FCA) has published a landmark review warning that artificial intelligence will fundamentally reshape retail financial services by 2030, with protecting consumers from poor financial decisions driven by persuasive AI responses emerging as one of the regulator's biggest challenges.
The Mills Review, led by FCA executive director Sheldon Mills and commissioned by the FCA Board, is the first review of its kind by a financial regulator. Published on July 6, it identifies four major AI-driven shifts expected to transform the sector: transforming firm operations, reshaping consumer journeys, altering competition and market power, and amplifying fraud and cyber risks.
"Artificial intelligence will transform financial services by 2030," Mills said. "It creates significant opportunities for consumers, firms and the wider economy. This report sets out a roadmap for how industry, regulators and government can prepare for the next phase of AI-driven change in our world-leading financial services sector."
Research commissioned by the FCA found that around one in five UK adults - equivalent to 11 million people - would be willing to use AI capable of acting autonomously within pre-set financial goals. The survey, conducted by Yonder Consulting in April 2026 among more than 5,000 retail financial services consumers, also found widespread concerns around trust, accountability and consumer control. The findings highlight a growing tension between demand for personalised, automated financial guidance and confidence in the accuracy and oversight of those tools.
Those concerns are particularly relevant for the pensions market, where mistakes can have lasting financial consequences.
David Brooks, head of policy at independent financial services consultancy Broadstone, said AI should support rather than replace regulated advice.
"Pensions are complex, long-term financial arrangements where mistakes can have lasting consequences," Brooks said. "While AI has a role to play in improving engagement and understanding, consumers need to treat it as a starting point, not a substitute for professional guidance, scheme information or regulated advice."
He said the FCA's challenge extends beyond regulating the technology itself to ensuring consumers understand where its limitations lie.
"As AI becomes more widely used, improving public understanding of its limitations will be just as important as improving the technology itself. Trust should be earned through accuracy and accountability, not assumed because an answer sounds convincing."
Brooks added that one of the regulator's biggest challenges would be preventing consumers from placing too much confidence in convincing but inaccurate AI-generated guidance.
"One of the FCA's biggest challenges may be protecting consumers from bad pension decisions driven by good-looking AI answers. Generative AI is excellent at sounding authoritative, but not always at being right. When retirement savings are involved, people need to understand that convenience is not the same thing as reliability."
The Mills Review sets out seven recommendations for the FCA Board, including adapting the regulatory perimeter, strengthening system-wide coordination, expanding the FCA's AI Lab and developing a trusted public-interest AI-enabled financial capability service. It also recommends building an AI-enabled supervisory model, signalling that the regulator intends to use artificial intelligence to transform its own supervisory operations as well as oversee firms deploying the technology.
FCA chair Ashley Alder said the report anticipates "the fundamental change agentic AI will bring to financial services", adding that the regulator's principles-based approach, including the Consumer Duty and the Senior Managers and Certification Regime, has helped it keep pace with rapid technological change.
The FCA also confirmed it will publish guidance on good and poor AI practices later this year, drawing on its engagement with regulated firms.
