It would have sounded like science fiction not so long ago. But the Financial Conduct Authority (FCA) is set to adopt new rules on the use of artificial intelligence (AI) when selling credit deals to bike buyers.
According to specialist finance firm iVendi, dealers and lenders may need to adopt an additional layer of compliance when using AI agents in motor finance. That’s if new recommendations to the FCA, contained in the Mills Review, are adopted. The Mills review was carried out by FCA executive director Sheldon Mills and includes analysis, research and engagement with firms, trade bodies, consumer groups, technology providers and international stakeholders. It found that retail financial services are moving from human-led towards AI-enabled services, and that AI could completely reshape the sector by 2030.
On one hand, the review found that AI could improve outcomes and support growth by cutting friction and improving advice. On the other hand, it could also amplify risks associated with fraud and cybersecurity.
James Tew, CEO at iVendi, said: “The FCA Review could have significant implications for anyone involved in retail motor finance who is using, or plans to adopt, agentic AI. Our interpretation is that a second level of AI, ideally using completely separate technology, will be required to oversee AI agents used in any regulated activity.
“If this oversight AI flags up an issue in real time, there would be a kill switch which ends the conversation immediately and passes the consumer to a human expert. It would also independently score every interaction and alert a senior manager where issues appear to have arisen.”
And he says all agentic AI activity would need to be recorded, similar to how call centres might be monitored using older technology.
“In exactly the same way as you might record every human call that takes place around regulated activity, you will ensure there are recordings and transcripts of everything the AI agent does. It’s evidencing that may be needed in the event of any complaint because ultimately, as now, overall responsibility lies with senior management”
And in a further ratcheting of the sci-fi image, the Mills Review says the regulator will have to build and adopt its own “agentic supervisory model” – i.e., the FCA will employ in-house AI systems to monitor consumer AI agents.
“This would see the FCA deploy AI-to-agent workflows to continuously monitor individual lenders and dealers in near real time – checking compliance data and testing evidence against expectations to detect systemic risks and consumer harm far faster than is possible with traditional, document-based reporting,” said Tew.
He added that iVendi was already working with a variety of lenders and dealers to help with AI agents.
“We’re able to provide data covering a wide range of areas, including finance quotes, eligibility checks and more, and can do so for a wide range of lenders, placing us in an almost unique position. It is an expanding area of our business.”