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AI oversight and proposed accountability reforms matter to financial services firms, senior managers, and compliance teams. Our article on AI in financial services explores the Financial Conduct Authority’s guidance on applying existing requirements, not introducing new rules, and highlights the steps firms should take to review customer journeys, test for bias, protect vulnerable customers and demonstrate human oversight and fair outcomes. Our Senior Managers and Certification Regime article outlines proposals to abolish certification and reduce regulatory pre-approvals, while retaining conduct obligations and senior management accountability. Firms should assess responsibility allocations, competence checks and record-keeping, but continue complying with the current regime until reforms take effect. Together, these developments signal that technological innovation and reduced administration do not mean reduced accountability: robust governance and demonstrable oversight remain essential.
Consultation Paper CP26/37 Senior Managers & Certification Regime Review: Phase 2
On 22 October 2026, the Financial Conduct Authority (FCA) published a consultation paper (CP26/37) outlining the proposals for the second phase of SM&CR specific reforms. The stated aim of the Phase 2 changes is to continue to reduce the regulatory burden of the SM&CR on firms. In this article we have outlined some of the key reforms and set out the benefits and the potential challenges these proposed changes may bring.
Please click here to read further on the Phase 2 reforms to SM&CR.
FCA’S findings on good practice and areas for improvement for AI in financial services: Consumer Finance aspects
The FCA published a comprehensive guidance titled "AI in financial services: good practice and areas for improvement" on 19 October 2026 together with a speech by Jessica Rusu, the FCA’s Chief Data, Information and Intelligence Officer, detailing the regulator's strategy. The FCA is not introducing new rules or making formal, firm-specific compliance determinations. Instead, it is emphasising that firms remain responsible for customer outcomes when using AI and must be able to show how they have applied, and complied with, existing regulatory expectations in practice. In this article we explore the FCA’s key focus areas for lenders, highlighting good practice and identifying where firms need to improve.
Please click here for more information on good practice and areas for improvement for AI in financial services.
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