The Financial Conduct Authority believes it already has the tools to oversee early uses of agentic AI in financial services, even as it waits for new legislative powers over the open banking infrastructure that could underpin the technology’s adoption.
The position, set out in an exclusive interview with the FCA’s executive director for payments and digital finance David Geale, is backed up by a new FCA-commissioned review into AI in retail financial services, which says open finance could become a foundation for trusted AI agents acting on behalf of consumers.
The Mills Review, published on Monday, says retail financial services are shifting from “human-led, episodic financial activity” towards services that are “AI-enabled, continuous and delegated”. Over time, it says, AI tools could evolve into agents capable of executing tasks for consumers and managing their finances.
But the FCA’s emerging position draws a line between the infrastructure needed to support open finance, where it still wants statutory backing, and the regulation of AI-enabled activity itself, where it believes existing rules on accountability, systems and controls, and the Consumer Duty, give it a basis to intervene.
Geale said the regulator was “comfortable that, as things stand today, the regime we have, based on accountability, consumer duty . . . is appropriate to let AI develop in a way that is within financial services”.
“We will, of course, keep that under review, and if things change, then we would look to do something with that,” he said. “But as we stand, we think that’s the appropriate way to focus on.”
The comments suggest the FCA is not preparing a bespoke agentic-AI rule book for financial services. Instead, it is seeking to apply its existing outcomes-based framework to cases where AI systems help consumers move money, compare products or optimise their finances within agreed limits.
The Mills Review reaches a similar conclusion. It says the overall regulatory framework “remains sound”, citing the Consumer Duty, Senior Managers Regime and operational resilience rules as features designed to flex across changing business models.
UK regulators believe current rules on accountability and the Consumer Duty are sufficient to manage emerging AI technologies in retail finance© Charlie Bibby/FT
Bounded consent
The report recommends that the FCA develop “trusted agent standards in Open Finance”, using its open finance work to standardise data sharing and “adjacent actions” by AI agents acting with open finance data. It warns, however, that open finance may mature more slowly than AI adoption, meaning agentic use cases could emerge before common standards exist across savings, investments, insurance and lending.
Open finance refers to the extension of open banking-style data sharing into areas such as savings, mortgages, pensions, insurance and investments, allowing consumers to give regulated firms or agents permission to access and act on a wider set of financial data.
Geale described open finance as the point at which open banking becomes “really exciting”, because it allows different parts of a consumer’s financial life to be brought together. He gave the example of a bank app using a customer’s consented financial data to identify opportunities to pay down a mortgage faster, even where the mortgage is held with another provider.
“As we stand here at the moment, there is always a human in the loop,” Geale said. “Even if the AI is saying, we have identified something for you, do you want to do it? OK, you want to do it, you’re giving permission now.”
That type of bounded consent, he said, could become “a big opportunity”. A customer could, for example, instruct an agent to keep £5,000 in a savings account and sweep any excess into mortgage repayments.
Go forth and . . . be sensible
But Geale said the regulator would be more concerned about open-ended delegation. “If you’re saying something like, go forth and maximise my life opportunities, without anything, that something somewhere is making a decision for you, that’s where I don’t think we’ve got the guardrails yet,” he said.
The Mills Review says open finance could be the “observation data layer” for agentic finance, providing portable and standardised data across sectors with clear provenance and traceability.
For now, however, the institutional framework for open banking and open finance remains incomplete. The UK is developing the so-called “Future Entity” to act as an industry-run standards body for open banking, including the development of standard APIs.
Geale said the Treasury would need to legislate to give the FCA powers over that body. “Because it’s not a financial services firm that’s dealing with customers in the same way, we need powers to actually oversee that institution.”
“As we stand here at the moment, there is always a human in the loop.”
He added that open banking could continue to develop while the legislative process played out, because the FCA already supervises banks and other firms at the customer interface, while the Payment Systems Regulator is involved through payment rails such as Faster Payments.
“I think we know we have the powers over the financial institutions who are dealing with customers, that they’re doing it in a thoughtful way,” Geale said. “So, no, I’m not concerned about that at the moment.”
Geale said existing rules already allowed the FCA to challenge firms where agentic systems created harmful outcomes. “The principles are always going to be the same,” he said. “Where does the accountability sit for achieving the right outcomes? What happens if something goes wrong? Are the right systems and controls in place?”
“If it’s not doing what it’s expected to do, it takes you right back to actually who’s accountable for fixing that and making sure that happens. And how do you put customers right?”
The FCA has also been using experiments to shape its approach before setting firmer policy. Geale said the regulator had run technology and policy sprints on open finance, including work on small and medium-sized enterprise finance and mortgages, bringing together banks, fintechs, regulators and other market participants to test use cases and identify risks.
The FCA’s smart-data accelerator allows firms to test applications using synthetic data, he said. “What we do is put them all together with a series of problem sets. They go away, think about how these things might be done, think about what the blockages are, the obstacles, the opportunities, and then that really helps us with our policy development.”
The Mills Review recommends that the FCA go further by scaling up its AI Lab and building an “AI-enabled agentic supervisory model”, allowing the regulator to monitor cross-firm patterns and system-wide risks as AI becomes more autonomous.
The review says AI agents could reshape market power, product distribution and consumer choice, particularly if the customer interface is controlled by operating-system assistants, general-purpose AI platforms or private gateways rather than open standards.
For banks, the opportunity is also a competitive threat. Geale acknowledged that open finance could allow fintechs to do “whizzy things” that take business from incumbents, but said banks also had an opportunity if they developed strong products and services of their own.
“You’ve got to be at the table to play,” he said.