Catenaa, Sunday, January 25, 2026- A UK parliamentary committee warned that gaps in oversight of artificial intelligence in financial services could expose consumers and the wider financial system to harm as adoption accelerates across the sector.

In findings ordered to be printed by the House of Commons earlier this month, the Treasury Committee said regulators are relying too heavily on existing rules while banks, insurers and payment firms expand their use of AI.

The panel said this approach leaves unclear lines of responsibility and weak protection for consumers as systems grow more complex and harder to audit.

The committee said AI is already embedded in core functions such as credit decisions, fraud detection and risk management, while regulatory supervision has not kept pace with the scale or opacity of these tools.

It warned that a cautious, wait-and-see stance risks allowing problems to emerge before authorities can respond.

The findings come as the UK government pushes to expand AI use across the economy, with Prime Minister Keir Starmer promoting the technology as a driver of growth, jobs and public service reform.

The committee acknowledged potential consumer benefits but said firms lack clear guidance on how long-standing rules apply in practice when decisions are driven by models rather than humans.

The panel urged the Financial Conduct Authority to issue guidance by the end of 2026 on how consumer protection rules apply to AI systems and how accountability should be assigned to senior executives when automated decisions cause harm.

It also flagged risks linked to reliance on major technology providers that build or supply AI models used across finance.