The Financial Conduct Authority has published a major review into the future impact of AI on retail financial services, concluding that the technology is likely to reshape the sector by 2030 while creating new risks for consumers, firms and regulators.

The review, led by FCA executive director Sheldon Mills, recommends the regulator considers within the next three to six months whether the regulatory perimeter should be expanded to cover general-purpose AI models that currently sit outside financial services regulation.

Research commissioned by the FCA found more than a quarter of UK consumers already trust large language models such as OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini for financial guidance, despite the fact these services are not subject to the same protections as regulated financial advice.

The review also found there is growing demand for “agentic AI” capable of carrying out financial tasks autonomously within user-defined goals. Around one in five people – equivalent to 11 million UK adults – said they would be likely to use such technology, although concerns remain around trust and maintaining control.

Mr Mills said: “Artificial intelligence will transform financial services by 2030. It creates significant opportunities for consumers, firms and the wider economy.”

Alongside the opportunities, the FCA warned that wider adoption of AI could increase risks including fraud, cyber attacks, consumer harm and greater market concentration.

The regulator also highlighted concerns that firms could become overly reliant on a small number of AI model developers, cloud providers and technology platforms, creating common points of failure across the financial system.

The review recommends strengthening regulatory coordination, expanding the FCA’s AI testing capabilities, preparing for autonomous financial services and developing AI-powered supervisory tools for the regulator itself.

FCA chair Ashley Alder said the report highlighted both the benefits AI could deliver and the importance of ensuring risks are effectively managed as the technology becomes more widely embedded across financial services.