'AI's use can benefit markets, such as cutting prices for consumers, but also cause imbalances' says UK watchdog

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Also read: OECD says 27% of jobs at high risk from artificial intelligence The FCA intends to take a strong stance on this matter, supporting beneficial innovation while implementing proportionate protections. Rathi will emphasise the agency's commitment to maintaining vigilance in mitigating cyber risks and fraud, as these threats are expected to rise with the increased adoption of AI.

"We will take a robust line on this – full support for beneficial innovation alongside proportionate protections. We will remain super vigilant on how firms mitigate cyber-risks and fraud given the likelihood that these will rise." Observing the doubling and amplifying of volatility during trading hours compared to the 2008 global financial crisis, the FCA notes a surge in highly automated strategies employed by investors across different markets and asset classes.

"This surge in intraday short-term trading across markets and asset classes suggests investors are increasingly turning to highly automated strategies," he will say today. This trend underscores the growing reliance on AI-driven techniques in financial decision-making processes.

Also read: ‘India, UK to target semiconductors, AI in new advanced tech pact’ Rathi will state that the FCA will examine how its existing regulations on senior managers' accountability and forthcoming "consumer duty" requirements for firms can effectively manage risks and capitalise on opportunities arising from AI. Additionally, the FCA plans to set out its thoughts on how to regulate and address the intersection of Big Tech and financial services, specifically examining the potential impact of large technology companies' extensive data stores on market competition.