Bank of England, FCA and Treasury Issue Joint Frontier AI Warning to UK Financial Services Firms as Cyber Capabilities Outpace Human Practitioners

The Bank of England, the FCA (Financial Conduct Authority), and HM Treasury published a joint statement warning UK financial services firms that frontier AI (the most advanced AI models currently being developed and deployed) already poses a material and escalating cybersecurity risk to the sector. The regulators stated that "the cyber capabilities of current frontier AI models are already exceeding what a skilled practitioner could achieve, and at a significantly higher speed, greater scale, and lower cost." The joint statement warned that these capabilities, if used maliciously, amplify cyber threats to firms' safety and soundness, their customers, market integrity, and financial stability. Firms were directed to take active steps to manage these risks and were pointed to existing cyber resilience guidance published jointly by the Bank of England, PRA (Prudential Regulation Authority), and FCA in October 2025, as well as resources published by the UK National Cyber Security Centre (NCSC) to help firms understand frontier AI, prepare for a vulnerability "patch wave," and deploy AI defensively to identify their own vulnerabilities. The statement arrives against a backdrop of intensifying AI-related hiring in regulatory practices: McDermott Will & Schulte separately announced the hire of privacy and AI partner Elisabeth Dehareng in Brussels, joining from Baker McKenzie, to advise on the EU AI Act, Digital Services Act, Data Act, Cyber Resilience Act, and NIS2 Directive. The hire underscores that regulatory advisory demand around AI governance is translating into concrete lateral hiring at the partner level across UK and EU practice groups.

Sign up to read →