FCA Rejects New AI Laws in Favor of Consumer Duty Testing

The Financial Conduct Authority confirmed this week it will not draft new AI-specific regulations for financial services. Instead of waiting for a bespoke AI rulebook, UK fintechs and financial SMEs must now govern their AI tools under existing Consumer Duty frameworks. Charlotte Clark CBE made the stance clear at the City & Financial Global AI regulation summit.

The FCA chooses testing over new laws

The UK financial watchdog has doubled down on its decision not to draft new AI-specific laws, choosing collaboration and live testing over strict new statutory rules. Speaking at the City & Financial Global AI regulation summit, the FCA's director of cross-cutting policy and strategy, Charlotte Clark CBE, stated the regulator wants to enable safe AI adoption without rushing to legislate.

This approach sharply divides London from Brussels and Washington. Rather than writing fresh legislation, the FCA is expanding its supercharged sandbox and AI live testing schemes. These environments give early-stage firms access to data and computing power while allowing mature systems to run in real-world conditions for better optimisation.