The Financial Conduct Authority has outlined plans to expand
its use of artificial intelligence and data tools under its 2026/27 work
programme, a move that could affect high-risk retail trading segments such as
CFDs by enabling faster supervision.
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Summit: Meet the largest APAC brokers you know (and those you still don’t!).
On fees, the FCA proposed a 1% increase in minimum and
application fees, below inflation. The annual funding requirement will rise by
0.7%, the lowest in a decade, with headcount kept flat to manage costs.
The regulator said a new authorisation tool is being
developed internally and will be integrated into existing systems, part of its
broader push to become “a smarter, more data-driven regulator.”
Generative AI to Accelerate FCA Authorisations
The FCA said it will use generative AI to streamline
supervision and reduce administrative burdens. The technology will review firm
submissions and support faster decisions, with rollout planned across
authorisations and supervision after testing.
The programme also includes plans
to integrate AI into workflows to detect harm earlier and improve case
handling. A sandbox will test automated data feeds between firms and the
regulator to improve the speed and reliability of information.
Sandbox Expansion and Reporting Changes
The FCA will expand its Supercharged Sandbox, allowing firms
to test AI-driven products with synthetic data. Reporting requirements will be
reduced by removing some data returns, and more processes will move onto the My
FCA platform. The regulator also aims to speed up authorisations and simplify
forms.
FCA Plans Global Presence, Market Reforms
The programme includes measures to support markets and
consumers. These include consulting on pension charge caps, proposals to remove
the seven-day IPO research waiting period, and plans to expand the FCA’s
presence in the United Arab Emirates, China and India.
The regulator confirmed it will begin supervising Buy Now
Pay Later from July, including affordability checks and authorisation reviews.
In financial crime, it is developing a “single, end-to-end, intelligence-led
service” to identify and stop harmful promotions more quickly.
Perimeter Report Flags AI, Prediction Market Risks
Nikhil Rathi, CEO, FCA, said the programme will help “identify risks
sooner, make faster, more consistent decisions and reduce unnecessary burdens
on firms.”
Separately, the FCA’s perimeter report highlighted areas for
possible legislative change, including financial promotions, betting products
and payments. It also flagged risks outside its remit, such as AML-only firms,
the use of AI in financial guidance, and speculative prediction markets.
This article was written by Tareq Sikder at www.financemagnates.com.
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