Paradigm Protection Artificial Intelligence: What it Means for your Firm David Ryder Head of Proposition, Paradigm Consulting 12 What this means for your firm There are no new FCA rules, but there is a sharper focus under the existing ones. The FCA is clear on several points: • You own the outcome. You remain responsible for client outcomes whoever built the tool. • Oversight must be proven. Human oversight, interaction and intervention need to be identified and evidenced, not assumed. • Clients already trust AI. Many are taking financial cues from AI tools, so check client understanding. AI can often hallucinate, and recent research suggests a high percentage of tools get things wrong on financial matters. • The advice gap is both an opportunity and a threat, with the risk that clients bypass the human adviser altogether. • Fraud, cyber risk and the governance burden on smaller firms are front and centre. AI is already built into tools that many mortgage and protection firms use every day, and the FCA has recently set out, via The Mills Review, how it expects the market to change.
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