On 16 February 2024, the Government published correspondence from the Secretary of State for Science, Innovation and Technology, Michelle Donelan, and the Economic Secretary to the Treasury and City Minister, Bim Afolami, asking a set of regulators to publish an update on their strategic approach to artificial intelligence (AI). The correspondence included letters to the Financial Conduct Authority (FCA) and to the Bank of England (BoE).

The letters focus on the Government’s approach to ‘Delivering a pro-innovation approach to AI regulation’. They note that the Government’s AI Regulation White Paper, published in 2023, outlined its framework for governing AI in order to drive ‘safe, responsible innovation’, including proposals to leverage the expertise of regulators to implement, interpret and apply the framework’s cross-cutting principles to AI use cases within their remits. This is intended to allow AI to be regulated in a targeted, context-specific and coherent manner across the economy.

The letter states that the proposals were broadly welcomed by stakeholders across industry, academia and civil society. However, it also pointed to one of the key areas of feedback, which was the need to ensure that regulators were considering the risks and opportunities of AI within their remits. Stakeholders wanted more detail on how the principles-based framework would be interpreted and applied by regulators to ensure that industry could prepare, the Government could coordinate, and civil society could scrutinise for gaps effectively.

Key regulators, including the FCA and BoE, are therefore being asked to publish an update by 30 April 2024, which outlines their strategic approach to AI and the steps they are taking in line with the expectations in the White Paper. The letters note that an update on these points would be particularly valued from both the FCA and BoE, given how significantly AI could impact upon the sectors, markets, and/or firms that they regulate.

The information that the FCA and BoE are being asked to address in their updates includes:

  • Their current assessment of how AI applies within the scope of their regulatory responsibilities.
  • The steps they are already taking to adopt the AI principles set out in the White Paper.
  • A summary of guidance they have issued or plan to issue on how the principles interact with existing legislation and the steps organisations they regulate should take in line with the principles.
  • The work they are doing to understand, assess and manage the current and emerging risks posed by AI as relevant to their sector and remit.
  • Interactions and overlap between their area of responsibility and that of other regulators, plus any assessments on AI risks and opportunities and how their regulatory, supportive and enforcement approaches will seek to tackle them.
  • Steps they have taken to collaborate with other regulators to identify and tackle AI-related issues that cut across regulatory remits.
  • Their current capability to address AI risks within their regulatory remit, and how this compares with the capabilities they consider that they need.
  • Their plans and activities over the coming 12 months.