UK financial regulator warns of 'arms race' to keep pace with AI adoption

Sheldon Mills, an executive director at the Financial Conduct Authority (FCA), warned that regulators face an 'arms race' to keep up with AI's rapid growth in financial services, as millions now use the technology for personal finance decisions. Speaking ahead of an FCA-commissioned report on AI's impact, Mills said the watchdog would need greater powers and urged UK authorities to consider whether large language models like ChatGPT and Claude should fall under regulatory rules. He emphasized that regulators must embrace AI themselves to monitor, detect, and tackle the risks posed by the technology's speed and scale of change.