The UK Treasury Committee insists on immediate actions from financial regulators to run stress tests, preparing systems for unexpected AI-driven market disruptions.

A recent report highlights potential risks to consumers and the financial sector due to the ‘wait-and-see’ stance of entities like the Financial Conduct Authority and Bank of England. MPs voice concerns about the widespread adoption of AI in financial services lacking accountability and profound understanding.

FCA’s Executive Director, David Geale, stated that firms have individual accountability for AI mishaps. Yet, feedback from financial institutions indicates struggles in gauging AI risks. The committee stresses clarity in responsibility for adverse AI decisions, notably in cases of unfair credit denial impacting consumers critically.

Despite the 2025 initiation of the Critical Third Parties regime to examine crucial service providers to financial services, enforcement has been lethargic. MPs urge the Financial Policy Committee to wield influence to ensure legislative efficacy.

Given financial services’ significant economic contribution, the report calls for vigilance against AI system failures, stressing the need for a proactive regulatory approach.