The Financial Conduct Authority (FCA) is considering the prospect of introducing its own AI agents to help enforcement and make sure markets continue working well.
The regulator floated the idea as part of its review into the long-term impact of artificial intelligence (AI) on retail financial services.
It highlighted the increasing risks associated with new technologies in the financial sector but noted that it was not planning to make major regulatory changes.
However, the regulator said it would examine how its regulatory model of authorisation, supervision, policy, and enforcement may evolve in response.
This could include its own AI police force to meet the speeds necessary to maintain market control.
“AI will likely accelerate the scale and speed at which risks develop, particularly when multiple autonomous AI systems interact,” the FCA said.
“The FCA will need to ensure its processes and systems can respond at pace. It may need to deploy its own AI agents to act faster, enabled by better data to ensure markets continue to work well.
“It will need to ensure its own rule making is sufficiently flexible and proactive to adapt to the challenges of fast paced changes and consider how to mitigate any potential information asymmetries between the FCA and regulated parties.”
‘Enhance enforcement toolkit’
Furthermore, it noted that as firms improve the way they use and present data, regulators will be able to interpret information more quickly and act sooner, but this could mean new tools and capabilities.
“This may change the balance between preventative and reactive supervision,” the FCA continued.
“We will also consider the consequences for enforcement and redress mechanisms, which may also need to handle cases where harms scale rapidly, involve autonomous systems, or require analysis of complex, evolving technical evidence.
“It is likely that our AI will require the FCA to enhance its enforcement toolkit as a result,” it added.
