The government has accepted all recommendations from the independent report “AI Adoption Plan: Financial Services” published on 14 July 2026. The adoption plan focuses on next steps for the government, regulators and industry to accelerate safe AI adoption and innovation in the financial services sector. The report was developed by the government’s independent AI Champions for financial services, Harriet Rees (Group CIO, Starling Bank) and Dr Rohit Dhawan (Head of AI and Advanced Analytics, Lloyds Banking Group) who were both appointed in January 2026 to spearhead the roll-out of AI.
As an early adopter of AI, the financial services sector is seen by the report to be well placed to realise productivity gains from AI for both consumers and businesses. If used well, AI could offer more responsive services and more personalised and accessible financial support to individuals. There is the potential for AI to benefit businesses including by enabling new products, enhancing decision-making and improving productivity. The report acknowledges that AI adoption in the financial services sector, whilst rapid, is still at an early stage. Accordingly, the report’s recommendations seek to unlock the full potential of AI.
Key themes
The report highlights five key themes emerging from stakeholder engagement where targeted action can significantly accelerate the safe adoption of AI:
- Regulatory clarity – fragmented guidance, limited visibility on available regulatory support and lack of clarity on how high-level principles (such as the Consumer Duty) apply to AI all risk holding the sector back
- Regulatory perimeter – there is a need to put in place proportionate guardrails for AI-enabled services in light of consumers routinely using general-purpose AI tools for budgeting, saving and investment tips, despite these being unregulated spaces
- AI sovereignty and resilience – dependency by UK firms on a small number of global AI model and cloud providers is concerning both where such providers lie outside direct regulatory oversight as well as due to operational resilience implications
- Skills and talent – upskilling of personnel working in the UK financial services sector is required to enable deep capability not just among engineers and data scientists but also leaders, risk managers, lawyers and other employees
- Agentic payment readiness – given the near-term focus of the report, the recommendations do not touch broader, more complex agentic applications but a useful immediate focus is seen to be clarifying how existing legal and regulatory frameworks apply, or need to adapt, specifically for agentic payments.
Recommendations
The recommendations put forward by the report are as set out below.
Regulatory framework
- Regulators should work together to ensure expectations of firms are clear and that services are accessible and navigable to support innovation
Regulatory perimeter
- The FCA should undertake a comprehensive review of the consumer, competition and wider impacts of financial guidance and advice-like outputs generated by general purpose large language models (LLMs). Based on the findings, the FCA should work with the government to develop a clear policy and regulatory response
- Adopt a consistent consumer disclosure for AI-driven services.
Resilience
- Accelerate implementation of the Critical Third-Party (CTP) regime, including assessment of Key AI/Cloud Providers
- Establish voluntary AI incident and “near-miss” sharing across the UK financial sector
- Launch a voluntary, industry-led AI third-party assurance scheme for financial services, with a view to potentially working with regulators and government to standardise it in the future
Skills and talent
- Encourage industry participation in the Financial Services Skills Compact and mobilise industry commitment
- HMT to work in partnership with industry to build on the Financial Services Skills Commission’s research and recommendations to explore the development of a sector-wide financial services AI skills plan
- Attract top global AI talent
Agentic Payments Readiness
- Leverage the upcoming HMT consultation to establish a “trust framework” to support agentic payments protocol
Additionally, in light of wider considerations such as UK competitiveness, the report suggests exploring forging industry-academia partnerships to advance the UK’s AI capability, building upon existing policy to communicate the UK’s Sovereign AI ambition and strengthening the UK’s resilience to AI-related risks across critical sectors.
Next steps
It has been a busy fortnight for those keeping up with regulatory developments related to use of AI in the financial services sector and the publication of the AI Adoption Plan comes hot off the heels of the Mills Review published on 6 July 2026. Whilst the question driving the Mills Review was how AI could reshape retail financial services by 2030 and beyond, there is some overlap between the reports as the Mills Review makes priority recommendations to the FCA on how it could respond. The government has confirmed that it will now work with regulators and industry on next steps taking into account both the AI Adoption Plan and the Mills Review.
