Britain's financial regulator has been urged to consider bringing large language models such as ChatGPT, Claude and Gemini within its regulatory framework as their influence over consumer financial decisions continues to grow, according to a review published on Monday and reported by Reuters.The independent review, commissioned by the Financial Conduct Authority (FCA), was led by the regulator's Executive Director, Sheldon Mills. The report recommends that the FCA assess over the next three to six months whether the regulatory perimeter should be expanded to cover AI models that increasingly shape financial decisions despite operating outside existing financial services rules.The review found that more than a quarter of UK consumers trust AI tools, including OpenAI's ChatGPT, Anthropic's Claude and Google's Gemini, for financial guidance. However, Reuters reported that many users remain unaware that the consumer protections applicable to regulated financial advice do not extend to these AI services.While financial advice in Britain can only be provided by authorised firms, the review cautioned that increasingly personalised recommendations generated by AI chatbots could blur the distinction between general guidance and regulated financial advice. It warned that continuous and adaptive recommendations may begin to resemble services that fall within the scope of financial regulation.The report also highlighted broader risks arising from the financial sector's growing dependence on a small group of technology providers. Reuters reported that common reliance on the same AI models, cloud infrastructure and technology platforms could create systemic vulnerabilities, including correlated behaviour, concentration risk and common points of failure across financial markets.The review noted that while AI adoption in financial services remains concentrated in lower-risk back-office operations, firms are increasingly deploying the technology in customer-facing functions such as complaint handling and investment guidance.A recent survey cited in the review found that 81% of financial firms globally have adopted AI to some extent, with 40% using the technology in more advanced applications.The FCA said the review represents the first comprehensive assessment by a financial regulator of AI's impact on the financial services sector, Reuters reported. However, the watchdog is not obligated to implement the recommendations.The report comes as regulators worldwide intensify scrutiny of AI-related risks, including cyber threats, operational resilience and the emergence of increasingly autonomous AI systems. Bank of England Deputy Governor Sarah Breeden recently signalled the potential need for dedicated AI regulation to address financial stability risks posed by advanced agentic AI systems.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)