Question to the Department for Business and Trade:

To ask His Majesty's Government what assessment they have made of the role of financial services firms in promoting the adoption of AI tools among UK small and medium-sized enterprises; and how this is being considered in government policy on SME digitalisation.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

Adoption of Artificial Intelligence can unlock significant productivity gains. It is important for government to work in partnership with industry, including financial services firms, to support Small and Medium-sized Enterprises (SMEs) with this.

The Department for Business and Trade created the SME Digital Adoption Taskforce and are leading a series of roundtables to tackle barriers SMEs face when adopting digital technologies. Members include Lloyds Banking Group, Barclays, Mastercard and Visa.

Innovate UK’s Next Generation Professional and Financial Services programme supports digital innovation and adoption across financial services. Within this, the Future Finance strand accelerates uptake by providing targeted support to Financial Services firms.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the risks posed by the deployment of autonomous AI agents by businesses, in particular for governance, security and data protection; and what steps they are taking to mitigate those risks.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

The progression of autonomous AI capabilities offers transformative potential to UK industries, the economy and productivity. However, the more complex and more sensitive the tasks we delegate to AI, the more thoughtful we must be about how we deploy the technology.

To facilitate responsible use of AI, the Roadmap to Trusted Third‑Party AI Assurance sets out the Government’s ambitions for the UK’s AI assurance market and the immediate actions we are taking to help the sector mature. This includes establishing the £11 million AI Assurance Innovation Fund and convening a national consortium of expert stakeholders to support the quality and growth of the assurance market.

This is complemented by the work of the AI Security Institute who are working to deepen our understanding of the novel risks posed by autonomous AI systems.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to ensure regulatory frameworks on the use of AI in consumer financial services protect users and support innovation.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

I refer the noble Lord to the answer I gave on 12 February 2026 to Question UIN HL14084.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the implications of the increased use of AI to drive cost efficiencies in banking for financial stability, competition and consumer outcomes in the financial services sector.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government’s ambition is to make the UK a global leader in AI, leveraging our dual strength in financial services and AI to drive growth, productivity, and consumer benefits. Encouraging safe adoption is an essential part of realising that ambition.

The treatment of customers by UK banks and building societies is governed by the Financial Conduct Authority (FCA), whose independent regulatory powers ensure consumer protection in the financial services sector. The FCA’s Principles for Businesses require firms to provide prompt, efficient, and fair service to all their customers. The FCA’s Consumer Duty requires firms to act in good faith, prevent foreseeable harm, and act in the best interests of consumers.

UK banks are required to comply with relevant laws and regulations that are fundamental to consumer protection. In April 2024, the FCA published an update on its regulatory approach to AI, making it clear that where firms use AI as part of their business operations, they remain responsible for meeting FCA rules. Firms remain fully accountable for outcomes delivered by AI systems.

The FCA is also the regulator responsible for promoting effective competition in the interests of consumers in financial services. The FCA’s 2024 update on its regulatory approach to AI also considers competition risks and the impacts of beneficial innovation on competition in financial services. The FCA also works alongside the Competition and Markets Authority (CMA) as part of the Digital Regulation Cooperation Forum (DRCF), including conducting joint consumer research on generative AI with the CMA.

The Bank of England’s Financial Policy Committee (FPC) is responsible for identifying and monitoring risks to UK financial stability. In their April 2025 Financial Stability in Focus publication, they set out the potential benefits and risks to financial stability that could result from AI use in the financial system, HM Treasury continues to work closely with the FPC and UK financial regulators to assess risks to financial stability.

The Government will continue to work with regulators and industry to ensure innovation proceeds safely and responsibly.

Question to the HM Treasury:

To ask His Majesty's Government what measures they are considering to support the responsible deployment of AI across UK financial services.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

As set out in the Government’s Financial Services Growth and Competitiveness Strategy, it is our ambition to make the UK ”the world’s most technologically advanced global financial sector”, leveraging our dual strengths in financial services and Artificial Intelligence (AI) to drive growth, productivity, and deliver consumer benefits, including steps to support safe AI deployment across the sector.

As committed to in the Strategy, the Government has appointed Financial Services AI Champions, Harriet Rees and Rohit Dhawan, who will focus on helping firms seize opportunities of AI while protecting consumers and financial stability.

As part of their work, the AI Champions will engage with stakeholders across the industry, with the regulators and with government to develop recommendations on areas of potential growth for AI in financial services and what action could be taken to seize the opportunities that AI brings.

The Government will carefully consider any recommendations before setting out its next steps, taking into account the benefits of innovation and also ensuring that risks are appropriately considered.

The Government will continue working closely with industry and the regulators to safely capitalise on the opportunities AI presents while protecting consumers and financial stability.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of recent trends in UK tech and fintech investment, and how this is informing their strategy to maintain competitiveness in emerging financial technologies.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

In 2025, the sector attracted $3.6 billion of investment - second only to the US. As set out in the Government’s Financial Services Growth and Competitiveness Strategy (“the Strategy”), the UK aims to be the world’s most technologically advanced global financial centre, and to remain a leading jurisdiction for Fintech firms to start-up, scale and list.

The UK has a long history as a powerhouse of financial services innovation. The Strategy set out a comprehensive package of reforms to maintain the UK’s global leadership in Fintech.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to ensure that AI governance and safety frameworks remain effective as AI systems develop in autonomy and complexity.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

Monitoring the capabilities of AI systems is necessary to ensure we can prepare for the risks that advanced AI could bring. The AI Security Institute (AISI) builds tools to understand AI capabilities, evaluates AI models to research these risks, and develops risk mitigations. This understanding can inform Government awareness and resilience efforts.

The Institute’s testing has identified a large number of AI model vulnerabilities that leading AI developers (such as OpenAI and Anthropic) have addressed prior to release.

Safety frameworks are developers’ own risk management policies. Developers will need to adapt them to remain effective as AI systems develop in autonomy and complexity.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to ensure that regulation of retail financial markets remains effective as AI adoption in fintech increases.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

HM Treasury works closely with the UK financial regulators to monitor evolving risks from new technologies, and ensure that the opportunities AI presents can be realised in a safe and responsible way. This includes engaging closely with the Financial Conduct Authority, and we support the approach it is taking to encourage the safe adoption of AI in financial services.

Alongside this, we have launched a new Centre for AI Measurement to develop new AI assurance tools and strengthen the UK AI Assurance ecosystem; committed to preserving the capability, trust, and collaboration of the AI Security Institute. We also concluded a call for evidence on the AI Growth Lab, a cross-economy AI sandbox, to inform further development and identify priority areas.

The government will act where these laws and initiatives are not enough to ensure AI security and we are exploring whether additional protections are needed.