Treasury committee warns inadequate AI oversight risks harm to UK consumers and finance

MPs on the Treasury committee warned that consumers and the UK financial system are being exposed to "serious harm" by the failure of government and the Bank of England to get a grip on the risks posed by artificial intelligence, in a new report. The report criticises ministers and City regulators, including the Financial Conduct Authority (FCA), for taking a "wait-and-see" approach to AI use across the financial sector, despite more than 75% of City firms now using AI.

Insurers and international banks are among the biggest adopters, using AI to automate administrative tasks or help with core operations such as processing insurance claims and assessing customers' credit-worthiness. "It is the responsibility of the Bank of England, the FCA and the government to ensure the safety mechanisms within the system keeps pace," said Meg Hillier, chair of the Treasury committee.

"Based on the evidence I've seen, I do not feel confident that our financial system is prepared if there was a major AI-related incident and that is worrying." MPs flagged a lack of transparency over how AI could influence financial decisions and said it was unclear whether data providers, tech developers or financial firms would be held responsible when things went wrong.

Key Topics

Business, Treasury Committee, Financial Conduct Authority, Artificial Intelligence, Uk Financial System, Meg Hillier