The Financial Conduct Authority has set out a technology-led approach to protecting market integrity as artificial intelligence, digital assets and round-the-clock trading reshape the financial system.
In a speech at a City Dinner in London, chief executive Nikhil Rathi said the regulator would make greater use of technology and intelligence, use its existing powers more assertively where appropriate, and work more closely with other bodies to address system-wide risks and financial crime.
The remarks do not create a new rulebook or announce a single enforcement action. They describe the regulator’s intended direction as it responds to markets that can develop more quickly than legislation, formal rule-making and traditional supervision.
Faster markets, wider risks
The speech identified several changes occurring at once: increasingly capable AI systems, decentralised finance, trading that can continue across weekends, and market structures operating alongside established venues. Each may offer new ways to provide services or improve efficiency. But together they can make it harder to see where risks are building and who is best placed to act.
The regulator highlighted volatility, concentration, market abuse, cyber security and cross-border financial crime as areas where rapid technological change can increase pressure on market integrity. Its argument is not that innovation should be stopped. Instead, it is that an analogue approach to oversight may leave public bodies reacting after a risk has already taken hold.
That distinction matters for firms and consumers. New tools can broaden access to services and speed up decisions, but the ability to act faster does not remove the need for systems to remain reliable, accountable and resilient when something goes wrong. The speech places confidence in markets alongside innovation, rather than treating the two as competing objectives.
Using data without treating technology as an answer on its own
Inside the regulator, AI tools are expected to help supervisors assess cases, bring together returns and intelligence, examine large datasets and spot information that may be missing or concerning. The intended benefit is to give specialist staff more time for difficult judgements, including whether coordinated activity could amount to market manipulation or whether a risk has become system-wide.
That is a plan for how supervisory work may be supported, not a claim that automated systems can make regulatory decisions on their own. The difficult questions remain human ones: which risks warrant intervention, how proportionate a response should be, and when the available evidence is strong enough to use formal powers.
The chief executive also questioned whether financial-crime controls are always directing effort to the most useful place. Information from customer checks, transaction monitoring and sanctions screening remains important, but the stated aim is to develop a fuller picture of risks that can span accounts, institutions and borders. The emphasis is on finding actual harmful activity rather than simply accumulating process evidence.
Existing powers and shared responsibility
A central theme of the speech was that risks do not necessarily begin inside the boundary of a single regulator. A disruption, criminal network or digital service may affect financial markets even when its origin lies elsewhere. The authority said it should consider which existing powers can be used where significant harm affects markets within its remit, rather than looking only at whether the first source of risk is directly regulated by it.
That approach still has limits. Government and Parliament decide the authority’s formal remit, while legislation and due process continue to matter. Using existing powers more actively is not the same as extending them without authority, and the speech did not announce new legal powers.
Partnership was presented as the other part of the response. The regulator pointed to work with law-enforcement bodies, other financial authorities, government and industry, arguing that no single organisation can manage technological and financial risks that cross institutional and national boundaries.
For regulated firms, the immediate message is one of heightened attention rather than an added compliance deadline. The practical effect of the approach will depend on future decisions, the evidence behind particular risks and the partnerships used to address them. The speech sets a policy direction: using better intelligence, technology and coordinated action to protect confidence in markets while allowing innovation to develop.
