# AI in financial services: the Consumer Duty, accountability and the FCA's approach

*No new AI rulebook does not mean no rules. What the existing ones ask when a tool touches a customer.*

## Production summary

- Modules to record: 2
- Total script: 819 words, about 5 minutes of finished audio
- Voices: Emma (host) and George (practice educator)
- Level: Advisers, brokers, lenders, insurers, compliance staff and managers in regulated firms

## Accreditation wording that must appear in the description

- **The CPD Certification Service** (planned): Application scheduled.
- **Financial Conduct Authority: approach to AI and the Consumer Duty** (aligned): Written against the FCA's published approach to AI and its Consumer Duty rules and guidance. Our own mapping, with no endorsement from the FCA implied. The FCA has said further material on AI will follow.

> Do not upgrade any of these words in a description or a thumbnail. Aligned is not accredited, and planned is not approved.


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## No new rulebook does not mean no rules

**Runtime** about 3 minutes. **Words** 392. **Starts at** 00:00 in the full course recording.

### Learning outcomes to state on camera

- State the FCA's approach to AI
- Apply the four Consumer Duty outcomes to a use of AI
- Explain where accountability sits
- Recognise the risk to customers in vulnerable circumstances
- Say what the Mills Review recommended

### Script


`[CUE 1]` *A shelf of existing rulebooks, none labelled AI, all with arrows pointing at an AI tool*

**EMMA**  [00:00]
George, my compliance officer says the FCA has no AI rules, so we can get on with it. Is that right?

**GEORGE**  [00:08]
Half right, and the wrong half is expensive. The Financial Conduct Authority says it doesn't plan to introduce extra regulations for AI. It'll rely on existing frameworks.

**EMMA**  [00:19]
So no rules.

**GEORGE**  [00:20]
No new rules. The existing ones all apply. The Principles for Businesses, the Consumer Duty, the Senior Managers and Certification Regime, systems and controls, outsourcing. None mentions AI. All of them apply to it.


`[CUE 2]` *The four Consumer Duty outcomes, each with a question put to a tool*

**EMMA**  [00:34]
Start with the Consumer Duty.

**GEORGE**  [00:36]
It requires you to act to deliver good outcomes for retail customers. Four outcomes, and you can put each to a tool as a question. Products and services. Is it fit for the customers it's used with?

**EMMA**  [00:50]
Price and value?

**GEORGE**  [00:52]
Does AI driven pricing leave some customers paying more for reasons you can't justify?


`[CUE 3]` *A chatbot conversation with a distressed customer and no hand over, beside one that hands over to a person*

**EMMA**  [00:57]
Understanding.

**GEORGE**  [00:58]
Can customers understand what an AI generated message or a chatbot is telling them? And do they know it's automated?

**EMMA**  [01:06]
And support.

**GEORGE**  [01:06]
Can a customer reach a human being? And are they as well supported as they'd be without the tool?


`[CUE 4]` *An organisation chart with a named senior manager holding responsibility, and a supplier outside the firm*

**EMMA**  [01:14]
What about vulnerable customers?

**GEORGE**  [01:15]
That's where automated journeys fail quietly. A chatbot doesn't hear distress. A scoring model treats a missed payment after a bereavement like any other.

**EMMA**  [01:25]
So what do I need?

**GEORGE**  [01:27]
A way for the tool to recognise and hand over. A route that doesn't depend on the customer using the tool at all. And monitoring of whether outcomes are worse for vulnerable groups.


`[CUE 5]` *A timeline: Treasury Committee in January 2026, the Mills Review on 6 July 2026, guidance expected by the end of 2026*

**EMMA**  [01:40]
If the supplier's tool gets it wrong, isn't that on them?

**GEORGE**  [01:45]
No. Under the Senior Managers and Certification Regime a named senior manager is responsible for each area and must take reasonable steps to prevent breaches. That doesn't move when you buy a tool. Outsourcing a function doesn't outsource the responsibility.

**EMMA**  [02:01]
Is anything about to change?

**GEORGE**  [02:03]
Probably. In January 2026 the Treasury Committee recommended the FCA give comprehensive and practical guidance on AI by the end of 2026. And on 6 July 2026 the FCA published the Mills Review, with seven recommendations.

**EMMA**  [02:17]
What's the headline?

**GEORGE**  [02:18]
The first recommendation. Review general purpose AI tools that sit outside the regulatory perimeter but give outputs that look like financial advice.

**EMMA**  [02:27]
Does that change what I have to do today?

**GEORGE**  [02:31]
No. They're recommendations. The Consumer Duty and the accountability regime are the law now.

### Sources for the on screen credit

- AI and the FCA: our approach, Financial Conduct Authority
- AI and the future of retail financial services (the Mills Review, 6 July 2026), Financial Conduct Authority
- FG22/5: final non-Handbook guidance for firms on the Consumer Duty, Financial Conduct Authority
- Senior Managers and Certification Regime, Financial Conduct Authority

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## Before a tool touches a customer

**Runtime** about 3 minutes. **Words** 427. **Starts at** 02:36 in the full course recording.

### Learning outcomes to state on camera

- Describe the safeguards for solely automated decisions about customers
- Explain how discrimination law applies to automated decisions
- Tell general information from a personal recommendation
- Explain why outputs must be explainable
- List what a firm needs in place before go live

### Script


`[CUE 1]` *A loan decision with four safeguards attached: told, representations, human intervention, contest*

**EMMA**  [02:36]
George, we're about to let a model decide small loans on its own. What do I need to have thought about?

**GEORGE**  [02:45]
Start with the decision itself. Declining a loan has a significant effect on a person. Since 5 February 2026 the law permits that to be made solely by automated means on ordinary personal data, with safeguards.

**EMMA**  [02:59]
Which are?

**GEORGE**  [03:00]
The customer must be told. They must be able to make representations. To obtain human intervention. And to contest the decision.


`[CUE 2]` *A model with no protected characteristics still producing different outcomes for two groups through a postcode*

**EMMA**  [03:08]
We'll have someone glance at the declines.

**GEORGE**  [03:11]
A glance won't do. The Information Commissioner's Office says, in draft guidance, that human involvement must be active rather than tokenistic. Someone who understands the system and has the authority to change the outcome.

**EMMA**  [03:25]
The model doesn't use race or sex. So no discrimination risk.

**GEORGE**  [03:29]
It doesn't need them. A postcode, a shopping pattern or a device type can produce different outcomes for groups defined by race, sex, age or disability. That can be indirect discrimination under the Equality Act.


`[CUE 3]` *A chatbot asked what should I do with my pension, with a line marked between information and advice*

**EMMA**  [03:43]
But the model's accurate.

**GEORGE**  [03:45]
On average. A model can be accurate on average and unfair to a group. Average accuracy isn't a defence to the Equality Act or to the Consumer Duty.

**EMMA**  [03:56]
So I monitor.

**GEORGE**  [03:57]
You compare outcomes across groups, understand why they differ, and justify the difference or remove it.


`[CUE 4]` *A customer asking why, and a member of staff able to explain the decision in plain words*

**EMMA**  [04:04]
Separate question. Our website assistant answers pension questions. Is that advice?

**GEORGE**  [04:08]
It might be. The line between information and a personal recommendation doesn't move because a tool's doing the talking. If someone asks what should I do with my pension, and it answers with a course of action for that customer, it may have crossed the line.

**EMMA**  [04:26]
It has a disclaimer.

**GEORGE**  [04:28]
A disclaimer doesn't change what it said. Test what it says when it's pushed. Restrict it to what you're permitted to do. And hand over to a qualified person where advice is needed.


`[CUE 5]` *A go live checklist of seven items with a switch marked off*

**EMMA**  [04:41]
What if a customer asks why they were declined?

**GEORGE**  [04:45]
You have to be able to answer in terms they can understand. And so does your senior manager when the regulator asks. A tool nobody in the firm can explain is one the firm can't govern.

**EMMA**  [04:59]
Give me the list before go live.

**GEORGE**  [05:02]
A named owner and senior manager. A written statement of what it may and may not do. Testing against known and difficult cases. A data protection impact assessment and supplier due diligence.

**EMMA**  [05:15]
And for customers?

**GEORGE**  [05:16]
A human route. Monitoring of outcomes by customer group. And a way to switch it off. Then keep the evidence, because we monitor outcomes needs numbers behind it.

### Sources for the on screen credit

- AI and the FCA: our approach, Financial Conduct Authority
- Automated decision making and profiling, Information Commissioner's Office
- Equality Act 2010, legislation.gov.uk
- AI and the future of retail financial services (the Mills Review, 6 July 2026), Financial Conduct Authority

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