Britain is facing "serious harm" from its lack of action on artificial intelligence risks, with influential MPs warning that consumers are being put at risk by the government's and Bank of England's failure to regulate AI use in the financial sector.
The UK's financial system, which relies heavily on artificial intelligence, has been left vulnerable to disaster. With over 75% of City firms now using AI, insurers and international banks among them, there is a growing concern that these firms could exacerbate financial crises if they make similar decisions in response to economic shocks. However, the UK's lack of clear regulations means that businesses have to figure out how existing guidelines apply to AI, leaving many worried about the consequences.
A report by MPs on the Treasury committee has highlighted the risks, including a lack of transparency around how AI could influence financial decisions and whether data providers, tech developers or financial firms would be held accountable if things went wrong. The use of AI also increases the likelihood of fraud, and the dissemination of unregulated and misleading financial advice.
Furthermore, rising AI use has increased firms' cybersecurity risks, leaving them overly reliant on a small number of US tech companies for essential services. This could amplify "herd behaviour", with businesses making similar financial decisions during economic shocks, risking a financial crisis.
MPs are now calling on regulators to take action, including the launch of new stress tests that would assess the City's readiness for AI-driven market shocks. They also want the Financial Conduct Authority (FCA) to publish practical guidance by the end of the year, clarifying how consumer protection rules apply to AI use and who would be held accountable if consumers suffer any harm.
The Treasury committee has warned that by taking a wait-and-see approach to AI in financial services, regulators are exposing consumers and the financial system to potentially serious harm.
The UK's financial system, which relies heavily on artificial intelligence, has been left vulnerable to disaster. With over 75% of City firms now using AI, insurers and international banks among them, there is a growing concern that these firms could exacerbate financial crises if they make similar decisions in response to economic shocks. However, the UK's lack of clear regulations means that businesses have to figure out how existing guidelines apply to AI, leaving many worried about the consequences.
A report by MPs on the Treasury committee has highlighted the risks, including a lack of transparency around how AI could influence financial decisions and whether data providers, tech developers or financial firms would be held accountable if things went wrong. The use of AI also increases the likelihood of fraud, and the dissemination of unregulated and misleading financial advice.
Furthermore, rising AI use has increased firms' cybersecurity risks, leaving them overly reliant on a small number of US tech companies for essential services. This could amplify "herd behaviour", with businesses making similar financial decisions during economic shocks, risking a financial crisis.
MPs are now calling on regulators to take action, including the launch of new stress tests that would assess the City's readiness for AI-driven market shocks. They also want the Financial Conduct Authority (FCA) to publish practical guidance by the end of the year, clarifying how consumer protection rules apply to AI use and who would be held accountable if consumers suffer any harm.
The Treasury committee has warned that by taking a wait-and-see approach to AI in financial services, regulators are exposing consumers and the financial system to potentially serious harm.
! Like, 75% of City firms already using it? That's wild! But seriously, this is a major concern - what if they make bad decisions during economic shocks and it all comes crashing down? 
We need stricter guidelines ASAP or else we'll be living in a world where our money is just, like, totally controlled by algorithms 
. And don't even get me started on the cybersecurity risks - I mean, who's holding these companies accountable if their systems get hacked? 
The FCA needs to step up its game and publish some actual guidance, stat! 
The fact that 75% of those firms are already using AI without any clear guidelines in place is just a recipe for disaster. I mean, what happens when there's an economic shock and everyone makes the same wrong decisions? It's like they're playing a game of financial roulette! 
And don't even get me started on the cybersecurity risks... it's like they're putting all their eggs in one basket with those US tech companies. What if they go down? Who's gonna protect our money then? 
The MPs are right, regulators need to take action ASAP and make some real changes before it's too late. We can't just sit back and watch as the financial system is turned into a giant game of risk. 
without any rules or guidelines its gonna end badly trust me my grandma was saying it all along 
we need clear regulations ASAP or else were gonna see financial crises and fraud galore 
. We need clear guidelines and regulations ASAP! And what's with all these firms relying on a few US tech companies for security? That's like asking a friend with a broken leg to do your taxes 
. It's time for the FCA to step up and provide some clarity on how this AI business works, 'cause right now it's just chaos 
. We need stronger cybersecurity measures in place, stat! 
I can totally get why these MPs are worried... it's like, AI is supposed to make our lives easier, but when it's not regulated properly, it could be super hurtful to people who just want to do the right thing with their money 
It's like, we need some real regulations here so these big players can't just do whatever they want and put everyone in danger. I'm talking about stress tests, clear guidelines, the whole nine yards. We can't just sit back and wait for something to go wrong. That's not how it works anymore. 
They're putting all our money at risk for their own convenience! 
. Seriously though, this is getting serious, fam! The UK's lack of action on AI risks is giving me nightmares 
. 75% of City firms using AI? That's a whole lot of robots in the financial sector... I mean, I love robots as much as the next person 
. It's like, what if AI goes rogue? What if those US tech companies we're relying on go down? We can't just sit back and wait for the other shoe to drop 
.
. We need to protect our consumers (and our sanity 
!