More finance firms join FCA’s AI testing initiative

Proactive approach to AI risks needed

Separately, UK financial services regulators were criticised earlier this year by MPs on the Treasury Committee for taking what they perceived as a “wait-and-see” approach to AI regulation.

In a report, MPs said: “The UK public and the country’s finance system are exposed to potential serious harm because regulators in the financial sector are not doing enough.”

In response, Sarah Breeden, deputy governor of financial stability at the Bank of England, said: “We share the [committee’s] view that AI has broad, complex and likely long-term implications for how the UK financial system serves the real economy. However, we do not agree with [its] characterisation that the bank is taking a ‘wait-and-see’ approach to the use of AI in financial services.”

She added: “Far from taking a ‘wait-and-see’ approach, we have invested heavily in analysing the current and future risks posed by both the use of AI in financial services, and the broader investment in and adoption of AI across the wider economy.”

Last week, major UK banks entered discussions with regulators, as well as finance and national security organisations, as the latest Anthropic AI model, named Mythos, unearthed decades-old vulnerabilities.

Meg Hillier, MP, chair of the Treasury Committee, said: “Recent developments in the world of AI, such as Anthropic’s Project Mythos, show us how fast this transformative technology is moving. It has never been more important that those responsible for maintaining the UK’s financial stability take a proactive approach to understanding and mitigating the risks AI may pose to our financial system.”