A group of British MPs tasked with scrutinising financial policy and regulation are looking into the use of AI’s across the UK financial services sector.
The Treasury Select Committee of the House of Commons, a cross-party parliamentary committee comprising back bench MPs, has opened a call to evidence on this matter.
The MPs state that they wish to understand how financial services can utilise AI while protecting consumers against any potential risks. This includes how AI is currently being used by UK financial firms.
With financial services a core UK industry, accounting for more than one-tenth of the the country’s GDP, and the tech industry also a significant and growing sector, the interconnection between the two has been noted by the government.
The previous Conservative administration was keen to see both finance and tech innovation in the UK, encouraging this in the AI field by setting up the AI Safety Institute.
The Labour government has taken up a similar mantle, though its election manifesto last year did include caution around AI’s impact on employment and the production of explicit AI content.
“Successive governments have made clear their intention to embed and expand the use of AI to modernise the economy,” said Dame Meg Hillier, Treasury Committee Chair.
“My committee wants to understand what that will look like for the financial services sector and how the City might change in the coming years as that transformation gathers pace.”
Finding Britain’s place in the AI race
The Committee has mapped out a number of areas it would like feedback on. As stated above, the existing use cases for AI in financial services are of interest, along with how this could change over the next 10 years.
MPs are also interested in the extent to which AI can improve productivity in financial services, a common talking point regarding the tech due to its capability to automate and simplify both routine, day-to-day tasks and more advanced ones like fraud detection.
AI risks are also on the agenda though, again something which has been a common talking point over the past few years. MPs want to find out what exactly the risks are, particularly relating to financial stability and vulnerable customers, and how these can be mitigated.
Another area which could potentially be assessed, though this is less concrete than the others, is the impact AI could have on employment. This is something that was of concern to Labour, at least in its manifesto last July, unsurprising given its historic connection to the trade union movement.
Various governments and legislators across the globe are becoming acutely aware of how much of an impact AI is making in the modern economy. The DeepSeek-R1 launch last month highlighted this in particular, with US President Donald Trump stating that US big tech firms should step up their AI game.
The UK is finding its role in this international AI race, which has drawn comparisons to the Space Race between the US and USSR in the 1950s and 60s. The British government is also banking on financial services and tech to make a big contribution to UK economic growth, and linking up the two via AI could serve this purpose – if done correctly.
“It’s critically important the City can capitalise on innovations in AI and continue to be a world leader in finance,” Hillier continued.
“We must, though, also be mindful of ensuring there are adequate safeguards in place to mitigate the associated risks, particularly for customers. This piece of work will allow us to see the full picture.”