FCA Sets Out Next Phase of Smarter, More Effective Regulation: AI Authorisations, GenAI Document Review, and the Lowest Fee Rise in a Decade
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The FCA's 2026/27 work programme maps a regulator in transformation, using its own AI tools to accelerate decisions while reducing unnecessary burden on compliant firms.
Context:
On 26 March 2026, the FCA published its Annual Work Programme for 2026/27 alongside its fees and levies consultation (CP26/11) and its Perimeter Report for 2026/27. The package represents the most detailed articulation yet of the FCA's strategy to become a smarter, more data-driven regulator, using artificial intelligence internally to improve the speed and consistency of regulatory decisions while reducing compliance burden on firms.
The FCA's annual funding requirement for 2026/27 is £788.9 million, the lowest year-on-year increase (0.7%) in a decade. Fees for firms are proposed to increase by just 1% (below inflation) across minimum fees, flat rate fees, and application fees. This reflects the FCA's investment in efficiency tools, reducing operational cost rather than expanding headcount.
The work programme outlines three transformational priorities: integrating AI into regulatory workflows (enabling earlier harm detection and faster decision-making); using generative AI to review documents received from firms (supporting faster authorisation decisions); and reducing burden through three fewer data returns, simplified digital forms, and more tasks migrated to the My FCA platform.
Rules and Guidelines:
On authorisations: the FCA is developing an internal AI-based authorisation tool to speed up assessment of applications for authorisation and variation of permissions. People remain at the heart of decision-making, but AI will triage and pre-assess applications, reducing processing time. Authorisation timeline improvements and simplified digital forms are specifically committed to.
On supervision: the FCA will use generative AI to review documents received from firms as part of its supervisory processes. This is significant; it means the FCA's ability to analyse large volumes of firm-submitted material is increasing, and firms should ensure their regulatory submissions are clear, accurate, and consistent, as AI-assisted review may surface inconsistencies more quickly than manual review historically would.
The FCA also published its Perimeter Report 2026/27, identifying 15 areas where legislative change may be needed. New issues flagged include speculative prediction markets (expanding rapidly internationally but outside the FCA perimeter) and general-purpose AI being used by consumers for financial guidance, both areas where the FCA is flagging potential regulatory gaps requiring HMT action.
Businesses Affected:
All FCA-regulated firms face a 1% fee increase but benefit from faster authorisation processes, simpler digital forms, and fewer mandatory data returns.
Firms in the authorisation pipeline (new entrants, variation of permission applicants, and crypto authorisation applicants ahead of the September 2026 gateway opening) will benefit from AI-assisted processing speed improvements.
Compliance and regulatory affairs teams that submit materials to the FCA should ensure submissions are accurate and internally consistent, given the FCA's planned generative AI document review capability.
Next Steps:
Review the Annual Work Programme for your sector. Each sector (payments, mortgages, consumer investments, wholesale markets, etc.) has specific priorities for 2026/27 that should inform your regulatory horizon scanning.
Ensure regulatory submissions are clear and consistent. GenAI document review tools are capable of identifying inconsistencies between disclosures, business plans, and prior submissions.
Register for My FCA. More regulatory tasks are being migrated to the platform, ensuring your firm's access and processes are set up will reduce friction as further tasks are transferred.
Monitor the Perimeter Report for developments. The two newly flagged areas (prediction markets and AI financial guidance) signal potential future consultations that may affect firms operating adjacent to these categories.
Source | FCA | Annual Work Programme 2026/27
