Artificial intelligence is set to reshape retail financial services over the next decade, with banks, insurers, lenders and payment providers facing new competitive pressures as consumers increasingly rely on AI to help manage their finances, according to a landmark review published by the UK’s Financial Conduct Authority (FCA).
The Mills Review, led by FCA Executive Director Sheldon Mills, examines how AI could transform retail financial services by 2030. It concludes that AI will change how firms operate, how consumers make financial decisions, how companies compete and how regulators oversee the market.
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The review also found growing public acceptance of AI-powered financial services. Research commissioned by the FCA suggests that around one in five UK adults would be willing to use AI capable of acting autonomously within agreed limits to help manage their finances, although concerns over trust and control remain.
Santosh “San” Nakra-Shah, Co-Founder and Managing Partner at ChilliMint Europe Limited, said the findings point to a wider change in retail finance.
“What stood out to me wasn’t simply that one in five UK adults say they’d be comfortable letting AI manage parts of their finances. It was what that means for retail finance.”
Consumer trust is evolving
The FCA believes AI has the potential to improve access to financial services, increase personalisation and make financial management more efficient. At the same time, it warns that wider adoption could increase risks linked to fraud, cyber security, market concentration and consumer harm.
Nakra-Shah compared today’s attitudes towards AI with the early days of contactless payments.
“People were understandably cautious. They worried about security, about fraud and losing control.”
Having worked on the rollout of contactless payments at Barclays, she said public confidence grew quickly once consumers experienced the benefits.
“Today, tapping a card feels completely normal.”
She believes AI adoption is likely to follow a similar pattern.
“Most people won’t wake up one morning and decide to adopt AI. They’ll simply find it becoming part of their everyday financial lives because it saves time, reduces effort and helps them achieve better outcomes.”
Competition could change
One of the review’s central themes is that AI may become an important gateway through which consumers discover and choose financial products. As AI assistants become more capable, they could compare products, recommend providers and even carry out transactions within agreed limits.
That could alter how firms compete.
“As AI starts helping people compare products and manage their finances, retail finance will begin to change,” Nakra-Shah said.
“Banks, insurers, payment providers and lenders won’t just be competing for a customer’s attention anymore. They’ll be competing to become the option an AI recommends.”
The FCA also warns that AI could shift market power towards large technology providers if firms become increasingly dependent on a small number of platforms or cloud services. It recommends stronger system-wide oversight and consideration of whether regulatory powers should evolve alongside AI adoption.
Preparing for AI-driven retail
The review makes seven recommendations for the FCA, including adapting the regulatory perimeter, strengthening oversight, improving resilience against fraud and cyber threats, and enhancing regulatory capability as AI becomes more deeply embedded in financial services.
For retailers operating financial services, loyalty programmes, payment solutions or consumer credit, the findings suggest that product visibility may increasingly depend on how AI systems interpret and compare products rather than how consumers navigate websites.
Nakra-Shah believes this represents an important strategic shift.
“For years, firms have invested heavily in their websites and customer journeys.”
As AI becomes another route into financial services, she said firms will also need to consider “how their products are understood, compared and selected by software acting on a customer’s behalf.”
She added that while the FCA review rightly focuses on trust, transparency and consumer protection, it may ultimately be remembered for marking “the point where retail finance stopped thinking only about customers and started thinking about the AI helping customers make decisions.”
