According to Reuters, the Treasury Committee has urged UK regulators to run AI specific stress tests for financial services and to publish clearer guidance on how existing rules apply to AI use. The report frames opacity, discrimination risks, AI enabled fraud, and AI chatbot advice as consumer protection issues as well as systemic risk questions.
According to the Financial Times, the Treasury Committee criticised a perceived “wait and see” stance and pressed for more proactive oversight as AI is already embedded in credit scoring, insurance, and other core financial functions. The coverage also highlights the concentration risk created by reliance on major cloud and AI providers alongside model risk and governance gaps
According to The Tyee, Canadian legal experts are testing how far existing provincial and criminal law tools can address non-consensual sexualised deepfakes linked to Grok. The piece is useful as a comparative prompt because it focuses on practical routes for victims rather than only policy debate
Regulation
The House of Commons Treasury Committee has published its report on artificial intelligence in financial services and recommends AI specific stress testing by the Bank of England and the FCA. It also calls for clearer application of existing rules to AI, and flags third party dependency and accountability for automated decisions as priority gaps
HM Treasury has appointed two Financial Services AI Champions, with appointments taking effect from 20 January 2026, to support responsible adoption and help shape practical guidance and engagement across the sector. This is an institutional signal that government wants visible governance capacity in parallel to regulator led supervision
Academia
A new open access article in the Journal of Banking Regulation analyses AI driven financial fraud risks and maps legal protections and governance responses for financial institutions. Its relevance for the UK debate is that it treats fraud, controls, and liability as linked design problems rather than separate compliance boxes
‘The Bathtub of European AI Governance’ paper examines how the EU AI Act tries to stay adaptive through regulatory learning mechanisms, while still relying on complex actor networks and information flows. It is useful for thinking about what evidence pipelines regulators need if they are to supervise fast moving model and market behaviour
Events
The Edinburgh Futures Institute is hosting a free Technomoral Conversation on AI narratives and counter narratives on 11 February 2026. The session explicitly links AI stories to copyright disputes and creative sector responses, which makes it directly relevant to AI plus law audiences
AI Factory Austria is running an online webinar on Trustworthy AI legal aspects on 17 February 2026. The session focuses on legal obligations in development and use, including EU AI Act risk classes and adjacent GDPR and copyright issues, and the listing states it is free for eligible participants
Takeaway
The Treasury Committee’s intervention is a push to convert widespread AI use in UK finance into auditable supervision, with stress testing and clearer regulatory expectations as the immediate levers. The core governance shift is away from abstract assurances and towards demonstrable controls for model decisions, third party dependencies, and fraud exposure, because those are the points where consumer harm and systemic risk converge.
Sources: Reuters, Financial Times, The Tyee, UK Parliament Treasury Committee, GOV.UK, Springer Nature, arXiv, Edinburgh Futures Institute, AI Factory Austria