UK Regulator Warns of 'Arms Race' to Keep Pace with AI in Financial Services

A senior UK regulator has warned that authorities are in an 'arms race' to keep up with the rapid adoption of AI in financial services, as millions of people now use the technology for personal finance decisions. Sheldon Mills, an executive director at the Financial Conduct Authority, told the Financial Times that the watchdog needs greater powers to stay ahead of AI growth and urged a review of whether large language models like ChatGPT, Claude, and Gemini should fall under its rules. Speaking ahead of an FCA-commissioned report on AI's impact, Mills stressed that regulators themselves must embrace AI to match the speed and scale of change in the sector and to effectively monitor and mitigate emerging risks.