FCA eyes machine learning in a bid to become a 'robo-regulator'

Technological advancements could eliminate transaction costs

The Financial Conduct Authority (FCA) is embracing "science fiction" in its plans for the future of financial regulation, which could see it using artificial intelligence (AI) to identify firms and individuals that are most likely to break rules before they have a chance to act.

Speaking at the Personal Investment Management & Financial Advice Association (PIMFA) summit on 31 October, acting director of strategy at the FCA Richard Monks explained technology was set to change the regulator's approach to supervision and enforcement. Specifically, Monks said technological advancements were informing how the FCA tackles "the challenge of the very small number of firms who, deliberately or not, cause issues and have a disproportionate impact on trust in the market, creating costs for the industry and for consumers". Half of asset managers to increase cybersecurity...