FCA pushes banks to prove AI testing: 'not theory, but evidence' - QA Financial
qa-financial.com
The FCA's demand for hard AI evidence over soft assurances is a textbook principal-agent crisis — and it reveals exactly how regulators lose control of the technology they're supposed to govern.
Principal-Agent ProblemRegulatory CaptureAsymmetric InformationPrecautionary Principle
Theory Briefing
- The FCA is demanding banks submit empirical AI test results, not theoretical claims — shifting the burden of proof onto institutions.
- The regulator's AI Lab initiative frames oversight as an active experiment, not a passive rulebook — a rare move in financial governance.
- When powerful AI systems are deployed by profit-driven banks and monitored by under-resourced regulators, the principal-agent problem becomes dangerously acute.