Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the risks to consumers and financial stability of the current regulatory approaches to AI in financial services.

The Government believes that the safe adoption of artificial intelligence (AI) by the financial services sector is a major strategic opportunity, with the potential to power growth across the UK. 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 FS and AI to drive growth, productivity, and deliver consumer benefits.

The Government has been clear that we will strike the right balance between managing the risks posed by AI and unlocking its huge potential. The UK financial regulators take an outcomes-based approach to regulating AI within the financial sector, drawing on existing frameworks to ensure that firms uphold strong consumer, stability and market standards, whether they use AI or not. Our current assessment, shared by the regulators, is that this framework is capable of ensuring the effective regulation of the use of AI. However, we will continue working closely with the regulators as the technology evolves to monitor risks and ensure that AI adoption continues in a safe and responsible way.

The Government is carefully considering the Treasury Committee’s report on AI in financial services and will respond in due course.