UK Lawmakers Push for AI Stress Tests in Financial Sector Amid Rapid Adoption
Over 75% of UK financial institutions now deploy artificial intelligence in Core services like trading, lending, and insurance. The Treasury Select Committee warns this unchecked expansion risks systemic failures, with interconnected AI systems potentially triggering cascading disruptions.
Cross-party legislators demand immediate AI-specific stress testing, criticizing regulators for a reactive stance. The Financial Conduct Authority faces pressure to publish formal guidance by year-end, while no firms have yet been classified under the Critical Third Parties Regime designed to mitigate such risks.
Market stability hangs in the balance as automation outpaces oversight. 'The speed of AI adoption has eclipsed our ability to foresee failure modes,' the report implies, highlighting how algorithmic decision-making now permeates high-stakes financial operations without adequate safeguards.
