Dr Virág Blazsek addresses AI in financial services in Parliamentary inquiry

As Artificial Intelligence reshapes every aspect of society, we must ask: 'What kind of future do we want?’

In March 2025, Dr Virág Blazsek submitted written evidence to the UK Parliament's Treasury Committee Inquiry on AI in Financial Services.

The Committee is inquiring into how UK financial services can take advantage of the opportunities in AI while mitigating any threats to financial stability and safeguarding financial consumers, particularly vulnerable consumers.

Dr Blazsek offers the following considerations and recommendations in her written evidence:

1. The UK should hold a national referendum on key AI issues before taking further steps. Regulatory responses – especially to Generative AI (GenAI) – ­are often hampered by deep philosophical questions that lack clear resolutions. Moreover, AI's impact reaches well beyond finance, affecting healthcare, employment, justice, public services, and more. A referendum would offer a broad democratic mandate and legitimacy for the far-reaching decisions we face. Yes, such a move is unusual in the UK – but so is the AI revolution.
2. Given current limitations and risks, AI in financial services should operate only under full human control.
3. AI adoption is accelerating; 91% of investment managers already use or plan to use AI, primarily in operations, HR, compliance, and marketing, rather than in core financial decision-making.
4. The UK is well-positioned globally, thanks to its strong financial sector and FinTech leadership. However, it must prioritise high standards in data privacy and cybersecurity, two areas that could serve as critical competitive advantages.
5. AI adoption is reinforcing the market dominance of large tech firms and major banks in already concentrated financial markets, thereby raising both systemic and competition risks.
6. GenAI's risks are magnified in this sector, given the sensitive and intermediary nature of financial services. But rushing into sector-specific AI regulations may be premature. A key responsibility of regulators is to resist sectoral and political pressures for hasty decisions.
7. GenAI-related risks often lie beyond the scope of traditional financial regulation and demand a broader policy perspective. Key regulatory priorities should include data security, privacy laws, and public education – specifically, improving both financial literacy and GenAI-related knowledge.
8. Although many organisations are eager to implement AI, a shortage of skilled professionals remains a major obstacle. Ultimately, human resources are the most critical factor in successful AI adoption.

It is Dr Blazsek’s opinion that:

The risks related to artificial intelligence, and in particular Generative AI, should be taken extremely seriously.

Dr Blazsek’s thoughtful and nuanced evidence on this issue is a prime example of how School of Law academics produce research that has a significant impact on policy matters. 

Dr Blazsek is the Deputy Director for the Centre for Business Law and Practice, and can be found on LinkedIn or at her personal website.