Balancing AI And Expertise In Financial Markets

At XLoD Global London 2025, Dominic Holland, director of market oversight, emphasized the importance of blending innovation with human expertise in financial markets. Holland highlighted the significant opportunities presented by artificial intelligence (AI) and advanced analytics, but cautioned that technological advancements should enhance, not replace, core strengths.

Regulatory Sandbox initiatives and TechSprints, like the 2024 Market Abuse Surveillance TechSprint, demonstrate the FCA’s pro-innovation stance. These efforts facilitate experimentation and collaboration while maintaining a focus on outcomes, governance, and resilience, rather than specific tools. However, firms remain responsible for AI models and their behavior, requiring human oversight to ensure safety and prevent deceptive practices.

The FCA acknowledges that AI primarily amplifies existing risks related to explainability, data quality, and model validation. Skilled analysts remain invaluable for understanding market behavior and context.

The FCA is also investing in its own technological capabilities to handle the vast amount of transaction data it receives annually, including over 8 billion MiFID reports and 53 million EMIR derivative reports. A forthcoming Consultation Paper will seek views on improving the UK transaction reporting regime.

Holland underscored the value of collaboration within the industry and with the FCA, aiming to foster innovation, prevent harm, and create a favorable environment for investment and growth. Ultimately, he encouraged a combined approach, using AI to expand possibilities while retaining the essential role of human expertise.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.