A new review by the FCA sets out how AI could reshape financial services for consumers, firms, markets and regulators by 2030 and beyond.
Led by FCA executive director Sheldon Mills, The Mills Review is the first work of its kind initiated by a regulator globally.
Drawing on views from across the financial services landscape, the report identifies four major AI driven shifts likely to impact retail financial services: the transformation of firm operations; the evolution of consumer journeys; the reshaping of competition and market power; and the amplification of fraud and cyber risks.
The report finds there is already consumer appetite for the use of agentic AI in personal finance, with research commissioned by the FCA showing that a fifth of people – equivalent to 11 million UK adults – are likely to use AI that can act autonomously within pre-set goals. But consumers in the survey are concerned about trust and control of AI.
"Intermediation is expected to evolve rather than disappear"
Discussing the intermediary market, the report noted that "AI could reduce reliance on traditional intermediaries and enable more direct distribution, but there is uncertainty about how far this will go".
The FCA believes "intermediation is expected to evolve rather than disappear", adding: "While some traditional intermediaries may face pressure, respondents anticipate the emergence of new forms of intermediation, particularly through AI platforms and agents. This could shift how value is captured within the sector and change how consumers access financial services."
Continuing, the report said: "Stakeholders, especially intermediary firms such as wealth managers and brokers, have also pointed to continuing demand for human-led advice or brokerage services. There may therefore be competitive space for firms that deliberately offer trusted human-led or non-AI services, in the same way some consumers continue to value high-street branches or direct human support.
"One key driver of intermediation is trust, and in particular having a specific human to speak to throughout a complex and high value process such as getting a mortgage. Our research shows that customers trust AI more readily for lower value financial services, or where the consequences of mistakes are lower."
The review concludes that AI is likely to become a "defining force" in retail financial services, transforming how firms operate, how consumers make financial decisions and how markets function. While AI has the potential to improve access, personalisation and efficiency, it could also amplify risks associated with fraud, cyber security, consumer harm and market concentration.
Ashley Alder, chair of the FCA, commented: "The board is enormously grateful to Sheldon for the rich, comprehensive report he’s delivered. His work anticipates the fundamental change agentic AI will bring to financial services. It highlights how consumers and firms can reap significant potential benefits as well how risks can be managed.
"As is clear in the report, we need to keep pace with a rapidly changing environment and the principles-based, outcomes focussed approach we’ve taken on AI – relying on the Consumer Duty and Senior Managers Regime – has been critical to us doing so. The recommendations build on work the FCA has been doing – not least allowing firms to test their use of AI with us – and our own use of AI to be a smarter regulator, more efficient and effective."
Karl Griffin, CEO and co-founder of JammJar, said: "The Mills Review is the clearest signal yet that AI in financial services has moved from experiment to expectation and the most important question in the entire review is who will control the client relationship by 2030. The FCA lists four candidates: incumbents, Big Tech, AI intermediaries, or the consumer's own AI agent. Advisers aren't guaranteed a seat at that table. so the way to keep it is to become AI-native yourself. That the intelligence sits inside your firm rather than between you and your client.
"This review should reassure advisers, not frighten them. The FCA has concluded that the existing framework, including Consumer Duty, is fit for purpose, and it frames AI as the answer to the advice gap rather than a replacement for advice. Human judgement stays at the centre. What changes is everything around it: the admin, the data, the follow-up. Firms that let AI carry that load will serve more clients, better, without hiring an army to do it."
Sophie Legrand-Green, head of policy at The Investing and Saving Alliance (TISA), added: “AI could widen access to financial support, but only if consumers can trust the tools in front of them.
"The Mills Review rightly recognises both the opportunity and the risk. As AI becomes more personalised and able to act as agents, with tools increasingly able to make recommendations or take actions on a consumer’s behalf, the financial services industry must step up to ensure protections, accountability and redress keep pace with innovation.
"Responsible AI adoption means clear rules, robust testing and strong governance. These tools must be tested against real consumer risks, including vulnerability, comprehension, bias and access to redress, before they become embedded in everyday financial decision-making.”
