As AI poised to reshape financial services, TISA calls for FCA and HMT to urgently regulate space to protect consumers from ‘wild west’ of AI search engines

As AI poised to reshape financial services, TISA calls for FCA and HMT to urgently regulate space to protect consumers from 'wild west' of AI search engines

April 15, 2025

In its submission to the Treasury Select Committee's call for evidence on Artificial Intelligence (AI) in Financial Services, TISA highlights the transformative opportunities of AI for both consumers and firms. This includes enhancing efficiency, improving risk management and security of firms and providing tailored advice, product recommendations and investment strategies for consumers.

However, without appropriate regulatory intervention, consumers are already being exposed to harmful practices and misinformation - especially when using publicly available AI tools for financial guidance.

Three key areas highlighted in TISA's response include:

1. Consumer protection and vulnerability

AI has the potential to revolutionise customer experiences, offering tailored advice and faster support. AI could enhance protections for vulnerable customers and offer personalised assistance. However, there are serious risks that unregulated AI tools, such as generative search engines, could provide misleading or inappropriate financial advice. TISA therefore urges the FCA and HM Treasury to bring AI search engines within the regulatory perimeter to ensure a level playing field and protect consumers from financial harm.

• Enabling innovation through regulatory reform

To unlock the full potential of AI in financial services, firms need clarity and confidence to experiment responsibly. TISA recommends that the FCA convenes the industry to address regulatory and cultural barriers to consumer-facing AI tools and accelerate initiatives like Open Finance to enhance data availability, transparency, and fairness.

• Equipping regulators to keep pace

AI's complexity demands that regulators are properly resourced and have access to data and technical expertise. TISA calls for a review of existing regulations to ensure they remain fit for purpose, and for new guidance where needed, particularly around explainability, accountability, and bias mitigation in AI systems.

Phil Turnpenny, Policy Executive at TISA, said:

"AI is already transforming the financial services landscape, and as it continues to evolve it will fundamentally reshape how consumers interact with their money and financial products. By encouraging innovation, the transformative power of AI can empower millions to make better financial decisions and have a bright financial future.

Whilst this will provide significant value for both consumers and firms, as with all emerging technologies, there are new challenges that need to be addressed promptly to protect consumers. For example, not all AI is created equal. Search engine-based AI tools are increasingly being used as a source of financial advice - often without oversight, transparency, or accountability. This has created a wild west situation and poses serious risks, particularly for vulnerable consumers who may be misled by confident-sounding but inaccurate information.

That's why we're calling on the FCA and HMT to regulate this space urgently. At the same time, our research shows that properly designed and regulated AI has the power to improve financial access and outcomes - especially for underserved groups. We must draw a clear line between risky, unregulated tools and those that are built with consumer protection at their core."

TISA remains committed to working with government, regulators, and industry to ensure the UK continues to lead in the safe and effective adoption of AI, for the benefit of consumers, firms, and the economy.

Notes to editors

1. TISA is a not-for-profit membership organisation committed to improving the financial wellbeing of all UK consumers by working collectively with the financial services industry to deliver solutions and champion innovation, for the benefit of people, our industry, and the nation.
2. TISA has approximately 270 member firms involved in the supply and distribution of savings and investment products and associated services. Members include the UK's major investment managers, retail banks, online platforms, insurance companies, pension providers, distributors, building societies, wealth managers, third party administrators, FinTechs, financial consultants, financial advisers, industry infrastructure providers and stockbrokers
3. Data on the impact of AI-powered tools on less confident investors was featured in TISA's Rethinking Performance Disclosures research in March, which is available on request.
4. The Bank of England's 2024 survey on Artificial intelligence in UK financial services reports that 75% of firms are already using AI, with an additional 10% planning to adopt it within the next three years.
5. According to the IMF, over 50% of trading in major markets currently utilises algorithms and AI.