The report warned that while AI adoption is accelerating across UK finance, regulatory clarity and risk management are not keeping pace.
Key points include:
➡️ Widespread AI use: Around 75% of UK financial services firms now use AI, particularly in banking and insurance, placing the sector ahead of most others;
➡️ Rising consumer risks: The report flags increased risks of fraud, unclear AI-driven decision-making, and potential financial exclusion linked to automated systems;
➡️ Regulatory ambiguity: The UK has no AI-specific financial regulation with supervisors relying on existing frameworks, which firms say leaves uncertainty over how rules are applied to AI use;
➡️ Accountability concerns: Firms struggle to understand responsibility for harm caused by AI under the Senior Managers and Certification Regime (SMCR), creating hesitation around advanced AI deployment; and
➡️ Operational resilience risks: Heavy reliance on a small number of AI and cloud providers raises systemic and cyber-resilience concerns for the financial system.
✅ Firms using or deploying AI should review governance, accountability, and consumer risk controls closely, and stay alert to forthcoming supervisory guidance and potential stress testing expectations.
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