The Investing and Savings Alliance (Tisa) is urging UK regulators to safeguard consumers from the chaotic landscape of AI search engines.
In a submission to the Treasury Select Committee regarding the role of Artificial Intelligence in Financial Services, this not-for-profit organization emphasizes the transformative potential of AI while stressing the necessity for regulatory measures to shield consumers from potential harm.
According to the Bank of England’s 2024 survey on AI in UK financial services, 75% of firms are currently utilizing AI, with another 10% planning to embrace the technology within the next three years. While the advantages of AI adoption include increased efficiency, improved risk management, enhanced security, and personalized advice and strategies for consumers, Tisa highlights significant regulatory gaps that could expose consumers to harmful practices and misinformation, particularly through publicly accessible AI tools for financial guidance.
Tisa warns that unregulated AI solutions, such as generative search engines, may deliver misleading or inappropriate financial advice. The organization is calling on the FCA and HM Treasury to bring AI search engines under regulatory oversight to protect consumers from risky financial guidance.
To fully harness the potential of AI in financial services, Tisa suggests that the FCA convene industry stakeholders to tackle regulatory and cultural challenges associated with consumer-facing AI tools. This effort should also focus on accelerating initiatives like Open Finance to improve data accessibility, transparency, and fairness.
Additionally, Tisa advocates for a review of existing regulations to ensure they remain effective and for the introduction of new guidelines, particularly in the areas of explainability, accountability, and bias mitigation in AI systems.
Phil Turnpenny, policy executive at Tisa, commented: “Research indicates that well-designed and regulated AI can enhance financial access and outcomes, especially for underserved populations.”
However, he cautioned that urgent attention is needed to address ongoing concerns: “Not all AI is created equal. AI tools based on search engines are increasingly used as sources of financial advice, often lacking oversight, transparency, and accountability. This creates a chaotic environment and poses significant risks, particularly for vulnerable consumers who may be misled by seemingly confident but inaccurate information.
“We are therefore urging the FCA and HMT to regulate this area without delay. It is crucial to distinguish between risky, unregulated tools and those developed with consumer protection in mind.”