TL;DR
FCA chief executive Nikhil Rathi used the City Dinner at Mansion House on 22 October to warn that fast-moving technology, AI included, is amplifying threats to market integrity. He said UK institutions risk falling into an “innovation delta” behind the markets they oversee. His answer is more AI inside the FCA, firmer use of existing powers and closer partnership with firms, rather than more rules alone.
The warning
Rathi called the risks to the integrity of markets “as serious as I have seen them”, listing volatility, concentration risk, new kinds of market abuse and cross-border financial crime, with fast-emerging technologies putting them “on steroids”. He pointed to frontier models that let AI agents act with growing autonomy, and to personal agents such as Meta Muse that are reshaping how people use financial and health services, and which he expects UK consumers to meet before long.
He also flagged a slower-burning problem: a judicial system under pressure, where claims drafted with AI’s help could make delays worse.
What the FCA will do
Rathi said the FCA will write new rules where needed, and will line up with AI standards set nationally or globally, a theme he noted the Prime Minister has set for the UK’s upcoming G20 presidency. But he argued that rule-making alone means “chasing yesterday’s market”.
Internally, he said AI tools already give supervisors a fuller picture of risk, with agents able to review cases, summarise returns and scan large datasets for gaps. That frees staff for harder calls, such as when coordination between agents becomes market manipulation. On cyber risk, he urged firms to report and learn from near misses and to invest in recovery, because prevention cannot be relied on every time.
Looking Forward
The speech fits the direction the FCA has set out to MPs, saying it wants AI to automate supervision wherever it can. For UK financial firms, in our view the message is twofold: expect a regulator that uses AI to look harder at data you already submit, and one more willing to act on risks that start outside its formal perimeter. Rathi’s request to the industry was to raise emerging risks with the FCA early.