FCA Warns AI Could Transform Finance and Supercharge Fraud Risks

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The UK’s Financial Conduct Authority (FCA) has published a landmark review into the impact of AI on retail financial services, finding that AI could transform how consumers manage money, while heightening risks of financial crime.

The Mills Review, which FCA executive director Sheldon Mills was commissioned to lead, examines how AI could reshape financial services by 2030. The report names four shifts in retail financial services that AI is likely to cause. These are listed as the transformation of firms themselves, new customer journeys, a reshaped market competition landscape, and amplified risks of financial crime and cyber harm.

While the review says AI could help consumers access more personalized support and make better financial decisions, it also warns that more autonomous tools could create new risks around trust, control, accountability, and consumer harm.

The report also highlights the threat of the use of AI in increasingly sophisticated scams, including deepfakes, synthetic identities, and highly personalized social engineering attacks. It warns that regulators and firms will need to move quickly to keep pace with criminals.

The review makes seven recommendations, calling on the FCA to revisit its regulatory perimeter, strengthen system-wide oversight, monitor the move toward autonomous AI models, expand its AI Lab, support the foundations for agentic finance, develop AI-enabled supervision, and explore a trusted public-interest AI financial guidance service.