Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
FCA Chief: AI Advancing Too Fast for Current Laws to Keep Pace
Financial Conduct Authority (FCA) chief executive Nikhil Rathi has warned that artificial intelligence is developing too quickly for lawmakers and regulators to keep up. Rathi made these comments at the techUK Agents of Change: Generative and Agentic AI in Financial Services 2026 conference.
Rathi stated that technology is moving much faster than many regulatory paradigms, and that legislation will never keep up. He highlighted that more than 80% of financial services firms are already using AI, according to industry studies he referenced.
Rathi said that financial services will play a key role in the UK’s ambition to become a global leader in AI. He noted that the sector provides the investment, infrastructure, and trust needed to help AI spread across the wider economy. However, he also warned that AI is challenging many of the assumptions on which markets and regulation were built.
The FCA is changing its approach to regulation in response to these developments. Rathi explained that the regulator is placing more emphasis on competition, collaboration, and understanding risks across the financial system. The FCA is rethinking how it supervises firms, gathers intelligence, and supports innovation. In some areas, detailed rules will still be needed, but in others, traditional rule-making may no longer work. Instead, regulators may need to act more as stewards of the financial system, guiding markets through rapid change.
The FCA is also exploring the use of agentic AI as a “first responder” to help monitor wholesale markets and spot potential market abuse more quickly. This system would analyse large amounts of data and work alongside human supervisors.
Rathi said that as AI becomes more widely used, regulators must pay close attention to competition and resilience. He noted that greater reliance on the same technologies could create new risks across the financial system.
Source: Mortgage Strategy