FCA publishes Mills Review on AI in retail financial services

The Financial Conduct Authority (FCA) has published its Mills Review, a review of the impact of artificial intelligence on UK retail financial services, in July 2026¹. The review was led by FCA executive director Sheldon Mills and sets out how AI could reshape retail financial services for consumers, firms, markets and regulators by 2030 and beyond².

The review identifies four systemic shifts it predicts will reshape retail financial services by 2030: the transformation of firms through AI-enabled automation; the emergence of agent-led consumer journeys, with more delegation to AI applications; a reshaped competitive landscape driven by AI; and an increase in both threats and the capabilities to defend against them¹. Retail Banker International describes the same four shifts as the transformation of firm operations, the evolution of consumer journeys, the reshaping of competition and market power, and the amplification of fraud and cyber risks².

Research commissioned by the FCA found that a fifth of people, equivalent to 11 million UK adults, are likely to use AI that can act autonomously within pre-set goals, though consumers surveyed were concerned about trust and control of AI². The review concludes that the existing regulatory framework is sound but will need to evolve, and that supervision by the FCA must also change, moving from a focus on individual firms or trigger events such as self-reporting of breaches to a macro-view of the whole ecosystem, supported by the FCA's own AI-enabled supervisory capability¹.

The review sets out seven recommendations²:

Sheldon Mills said: "Artificial intelligence will transform financial services by 2030. 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."²

The review describes an "autonomy spectrum", a sliding scale for how human roles may evolve from operator to observer as AI systems take on greater decision-making authority¹. It identifies five areas where the current regulatory framework is likely to come under stress as firms move across that spectrum, with operational resilience and the regulatory perimeter seen as more likely to suffer stress in the nearer term; the Senior Managers and Certification Regime and Consumer Duty are also highlighted as under stress where humans move towards observing AI systems². The review reaffirms Consumer Duty as the anchor for AI². According to the review, those who control the AI layer "may influence which products are visible… where value is captured, shifting the customer relationship away from financial services providers"¹.

Why it matters for households

The review concerns retail financial services, so its conclusions bear on the accounts, savings, investments, insurance and payments that households already hold. The FCA's own commissioned research indicates that around 11 million UK adults are likely to use AI that can act autonomously within pre-set goals², which is the point at which decisions about a household's money may be taken by software rather than by the person. The review states that the existing framework is sound but needs to evolve, and that supervision must change¹, so the rules governing how firms treat customers are expected to develop rather than be replaced. Consumer Duty remains the anchor for AI under the review², meaning firms are still expected to deliver and evidence good outcomes for customers. The review also flags that, as AI takes on more decisions, outcomes become harder to evidence, and that operational resilience and the regulatory perimeter are the areas most likely to come under stress in the nearer term². The review notes that the FCA will need to grapple with the possible need to "authorise" AI and the corresponding liability model¹; no such authorisation regime has been reported as decided.

What happens next

The review sets out seven recommendations, including securing and adapting the regulatory perimeter, strengthening system-wide coordination and oversight, and building an AI-enabled agentic supervisory model². Shortly after the review was published, the government opened its consultation on Modernising Payment Services Regulation¹. The Competition and Markets Authority has separately published a discussion paper examining the competitive implications of agentic AI¹. No timetable for implementing the recommendations has been reported.