The Investing and Savings Alliance (Tisa) is calling on UK regulators to protect consumers from the ‘wild west’ of AI search engines.
In a submission to the Treasury Select Committee’s call for evidence on Artificial Intelligence in Financial Services, the not-for-profit member organisation highlights the transformative power of AI and the need for appropriate regulatory intervention to protect consumers from harm.
The Bank of England’s 2024 survey on Artificial intelligence in UK financial services reports that 75% of firms are already using AI, with an additional 10% planning to adopt it within the next three years.
While the benefits from the adoption of AI include enhancing efficiency, improving risk management and security of firms and providing tailored advice, product recommendations and investment strategies for consumers, Tisa points to signifcant regulatory gaps which could expose consumers to harmful practices and misinformation — especially when using publicly available AI tools for financial guidance.
The agency says there are serious risks that unregulated AI tools, such as generative search engines, could provide misleading or inappropriate financial advice. Tisa is urging the FCA and HM Treasury to bring AI search engines within the regulatory perimeter to protect consumers from hazardous financial advice.
To unlock the full potential of AI in financial services, Tisa recommends that the FCA convenes the industry to address regulatory and cultural barriers to consumer-facing AI tools and accelerate initiatives like Open Finance to enhance data availability, transparency, and fairness.
Tisa also wants to see a review of existing regulations to ensure they remain fit for purpose, and for new guidance where needed, particularly around explainability, accountability, and bias mitigation in AI systems.
Phil Turnpenny, policy executive at Tisa, says: "Our research shows that properly designed and regulated AI has the power to improve financial access and outcomes — especially for underserved groups."
However, there remain serious issues that need to be urgently addressed: “Not all AI is created equal. Search engine-based AI tools are increasingly being used as a source of financial advice — often without oversight, transparency, or accountability. This has created a wild west situation and poses serious risks, particularly for vulnerable consumers who may be misled by confident-sounding but inaccurate information.
"That’s why we’re calling on the FCA and HMT to regulate this space urgently. At the same time, We must draw a clear line between risky, unregulated tools and those that are built with consumer protection at their core.”