Britain needs ‘AI stress tests’ for financial services, lawmakers say

UK financial firms heavily reliant on US tech giants for AI services. (Reuters)
Short Url
Updated 20 January 2026
Follow

Britain needs ‘AI stress tests’ for financial services, lawmakers say

  • Lawmakers urge AI-specific stress tests for financial firms

LONDON: Britain’s financial watchdogs are not doing enough to stop artificial ​intelligence from harming consumers or destabilising markets, a cross-party group of lawmakers said on Tuesday, urging regulators to move away from what it called a “wait and see” approach.
In a report on AI in financial services, the Treasury Committee said the Financial Conduct Authority and the Bank of England should start running AI-specific stress tests to help firms prepare for market shocks triggered by automated systems.
The committee also called on the FCA to ‌publish detailed guidance ‌by the end of 2026 on how ‌consumer ⁠protection ​rules apply to ‌AI, and on the extent to which senior managers should be expected to understand the systems they oversee.
“Based on the evidence I’ve seen, I do not feel confident that our financial system is prepared if there was a major AI-related incident and that is worrying,” committee chair Meg Hillier said in a statement.

TECHNOLOGY CARRIES ‘SIGNIFICANT RISKS’

A race among banks to adopt agentic AI, which ⁠unlike generative AI can make decisions and take autonomous action, runs new risks for retail customers, the ‌FCA told Reuters late last year.
About three-quarters ‍of UK financial firms now use ‍AI. Companies are deploying the technology across core functions, from processing insurance claims ‍to performing credit assessments.
While the report acknowledged the benefits of AI, it warned the technology also carried “significant risks” including opaque credit decisions, the potential exclusion of vulnerable consumers through algorithmic tailoring, fraud, and the spread of unregulated financial advice through AI chatbots.
Experts ​contributing to the report also highlighted threats to financial stability, pointing to the reliance on a small group of US tech ⁠giants for AI and cloud services. Some also noted that AI-driven trading systems may amplify herding behavior in markets, risking a financial crisis in a worst-case scenario.
An FCA spokesperson said the regulator welcomed the focus on AI and would review the report. The regulator has previously indicated it does not favor AI-specific rules due to the pace of technological change.
The BoE did not respond to a request for comment.
Hillier told Reuters that increasingly sophisticated forms of generative AI were influencing financial decisions. “If something has gone wrong in the system, that could have a very big impact on the consumer,” she said.
Separately, Britain’s finance ‌ministry appointed Starling Bank CIO Harriet Rees and Lloyds Banking Group ‘s Rohit Dhawan as “AI Champions” to help steer AI adoption in financial services. 


Palestinian protester, detained for nearly a year, says ‘inhumane’ jail conditions prompted seizure

Updated 5 sec ago
Follow

Palestinian protester, detained for nearly a year, says ‘inhumane’ jail conditions prompted seizure

A Palestinian woman who has been held in an immigration jail for nearly a year after she attended a protest in New York City said she suffered a seizure after fainting and hitting her head last week, an episode she linked to “filthy” and “inhumane” conditions inside the privately run detention facility.
Leqaa Kordia, 33, was hospitalized for three days following the seizure, which she said was the first of her life. She has since returned to the Prairieland Detention Facility in Texas, where she has been held since March.
In a statement released through her lawyers on Thursday, Kordia said she was shackled the entire time she was hospitalized and prevented from calling family or meeting with her lawyers.
“For three days in the emergency room, my hands and legs were weighed down by heavy chains as they drew my blood and gave me medications,” Kordia said. “I felt like an animal. My hands are still full of marks from the heavy metal.”
Her doctors, she said, told her the seizure may have been the result of poor sleep, inadequate nutrition and stress. Her lawyers previously warned that Kordia, a devout Muslim, had lost 49 pounds (22 kilograms) and fainted in the shower, in part because the jail had denied her meals that comply with religious requirements.
“I’ve been here for 11 months, and the food is so bad it makes me sick,” the statement continued. “At Prairieland, your daily life — whether you can have access to the food or medicine you need or even a good night’s sleep — is controlled by the private, for-profit business that runs this facility.”
Department of Homeland Security spokesperson Tricia McLaughlin didn’t immediately respond to a request for comment from The Associated Press, but said in a statement to The New York Times that Kordia wasn’t being mistreated and was receiving proper medical care.
A resident of New Jersey who grew up in the West Bank, Kordia was among around 100 people arrested outside Columbia University during protests at the school in 2024.
The charges against her were dismissed and sealed. But information about her arrest was later given to the Trump administration by the New York City police department, which said it was told the records were needed as part of a money laundering investigation.
Last year, Kordia was among the first pro-Palestinian protesters arrested in the Trump administration’s crackdown on noncitizens who had criticized Israel’s military actions in Gaza. She is the only one who remains jailed.
She has not been accused of a crime and has twice been ordered released on bond by an immigration judge. The government has challenged both rulings, an unusual step in cases that don’t involve serious crimes, which triggers a lengthy appeals process.
Kordia was taken into custody during a March 13 check-in with US Immigrations and Customs Enforcement. At the time, federal officials touted her arrest as part of the sweeping crackdown on pro-Palestinian campus activists, pointing to her 2024 arrest outside of Columbia as proof of “pro-Hamas” activities.
Kordia said she joined the demonstration after Israel killed scores of her relatives in Gaza, where she maintains deep personal ties. “My way of helping my family and my people was to go to the streets,” she told The Associated Press in October.
Federal officials have accused Kordia of overstaying her visa, while casting scrutiny on payments she sent to relatives in the Middle East. Kordia said the money was meant to help family members whose homes were destroyed in the war or were otherwise suffering.
An immigration judge later found “overwhelming evidence” that Kordia was telling the truth about the payments. Attorneys for Kordia say she was previously in the US on a student visa, but mistakenly surrendered that status after applying to remain in the country as the relative of a US citizen.
In her statement on Thursday, Kordia said the detention facility was “built to break people and destroy their health and hope.”
“The best medicine for me and everyone else here is our freedom,” she added.