£223.6bn sector faces AI risks as UK finance watchdog wants firms to report failures and close calls

Reporting AI incidents

The UK’s financial regulator says existing requirements for reporting major incidents should cover significant AI failures and near-misses. The call comes as financial services adopt systems that can operate with increasing autonomy.

A speaker identified in the report as a woman said poorly governed AI could bring consumer harm, cyber vulnerabilities and operational failures, potentially on a much larger and faster scale. She also described near-miss reporting for agentic AI as both a regulatory and national security priority.

Why close calls matter

Another speaker said firms should identify and report serious incidents and near-misses, including those linked to AI risks across essential services. The speaker added that serious AI incidents should be reviewed properly.

The speaker compared the approach with aviation, where learning from near-misses can help prevent future crashes. The report does not identify either speaker by name or position.

Pressure for stronger oversight

Financial services contributed £223.6 billion to the UK economy in 2025, equal to 8 percent of national output. The sector’s share was the fourth highest among OECD countries.