AI will transform financial services by 2030 and beyond, with around 11 million UK adults likely to use artificial intelligence that can make decisions for them within pre-set goals, according to the landmark Mills Review. However, while AI technology will create significant opportunities, it is also likely to amplify cyber risks and make scams even harder to spot, meaning the fraud fightback will need to keep pace.
Mills Review Highlights Opportunities and Risks
The review, led by Financial Conduct Authority (FCA) executive director Sheldon Mills, found that AI could help tackle 'longstanding weaknesses' in retail financial markets and assist people to manage their finances more effectively, bringing both personal and economy-wide benefits. Mills said: 'Artificial intelligence will transform financial services by 2030. It creates significant opportunities for consumers, firms and the wider economy.'
The review addresses the advice gap (only 9% of consumers use traditional advice), the protection gap (just 30% hold life or income protection), low switching levels, financial exclusion, and suboptimal saving, with around £300 billion sitting in low interest paying accounts.
Consumer Survey Reveals Adoption Trends
Yonder Consulting surveyed over 5,000 UK retail financial services consumers in April. One in six (16%) people engaged in personal finance activities said they currently use AI to support personal finance, rising to nearly a quarter (23%) among those already using AI elsewhere. Of the 69% who had shopped for or used a financial product in the previous 12 months, 17% used AI to assist them.
Current use is mainly 'assistive,' with people using AI to summarise, explain, simplify, and compare information, rather than delegate decisions outright. Use is higher for products such as investing, debt management, and tax planning. Some people are already willing to give AI deeper access: 13% would give AI real-time access to banking and financial data.
Benefits and Concerns Balance
More than half (55%) of people identify at least one possible benefit from AI in day-to-day money management, but 24% said nothing would persuade them to use AI in financial services. Concerns include potential misuse of personal and financial data, lack of protection if something goes wrong, and concentration of power among large financial services firms.
Fraud and Cyber Risks Amplified
The review found that AI is likely to amplify fraud and cyber risks, making attacks faster, cheaper, more scalable, and more persuasive. 'Deepfakes, synthetic identities and personalised social engineering are taking fraud and cyber risks into a new era,' the review said. The same technologies used to attack can help protect the system, meaning firms, regulators, and partners need access to similar AI capabilities.
Recommendations for the Future
The Mills Review recommends developing a trusted public-interest AI-enabled financial capability service and strengthening system-wide coordination and oversight. FCA chair Ashley Alder said: 'The recommendations build on work the FCA has been doing – not least allowing firms to test their use of AI with us – and our own use of AI to be a smarter regulator.' The FCA will launch an AI good and poor practice publication later this year.
