Multimodal AI for Scaling Targeted Support: Navigating the FCA Advice–Guidance Boundary
Summary
The Financial Conduct Authority’s Advice Guidance Boundary Review (AGBR) seeks to address a persistent advice gap in UK financial services by enabling new forms of scalable, decision-relevant consumer support that sit between generic guidance and personalised financial advice. This challenge is particularly acute in pensions, where consumers face complex, long-term decisions but exhibit low engagement with traditional advice services. This white paper examines the potential of multimodal generative artificial intelligence to deliver targeted support in pensions while remaining within the advice–guidance boundary. Drawing on recent advances in Vision Language Models and multimodal conversational architectures, the paper develops a solution framework for speech-enabled, audio-visual digital advisors that are compliant by design. A Digital Pensions Advisor prototype is presented to demonstrate how such systems can interpret real consumer narratives, recognise and respond appropriately to vulnerability, and maintain boundary discipline when confronted with requests for personalised advice. The paper concludes by outlining a roadmap for strengthening auditability, explainability, and supervisory readiness, and by identifying future research directions, including the role of formal and informal information sources in shaping consumer understanding. Collectively, the findings suggest that multimodal AI can play a meaningful role in scaling targeted support in pensions while preserving regulatory safeguards and consumer trust.
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About FRIL
Consumers at the Heart of Innovation: Financial Health Evaluation in the UK Regulatory Landscape
This whitepaper examines the evolving landscape of financial services in the UK, with a focus on consumer-centric innovation and the regulatory framework supporting financial health. Against a backdrop of rising household debt and consumer vulnerabilities, we explore how innovative fintech solutions, enabled by emerging technologies, are reshaping the evaluation of financial health beyond traditional credit scoring methods.
The paper provides an in-depth analysis of the current regulatory environment, including the Financial Conduct Authority’s (FCA) Consumer Duty and other initiatives aimed at enhancing financial wellbeing. A case study demonstrates an AI-driven framework for intelligent credit scoring, illustrating the potential for more holistic financial health assessments.
We discuss the critical role of Open Banking and Open Finance as enabling infrastructures for innovation, while emphasising the importance of data protection and digital ethics. The paper also outlines key directions for fintech innovation that prioritise consumer needs.
Looking to the future, we examine emerging trends in consumer innovation, potential regulatory developments, and the long-term impact on the financial services industry. The paper concludes that by placing consumers at the heart of innovation, the UK financial sector can build a more resilient, inclusive, and sustainable future, setting a global benchmark for fostering financial health in an era of rapid technological change.
About FRIL
From Crisis to Prosperity: AI and Open Finance for Holistic Financial Health and Smart Future Planning
The financial services industry stands at a critical inflection point. Traditional credit-scorecentric frameworks, rooted in historical repayment data and broad demographic categories, are increasingly incapable of capturing the full spectrum of consumers’ financial health. The COVID-19 pandemic, successive cost-of-living crises and wider economic shocks have exposed deep vulnerabilities in reactive, one-dimensional risk models. Consumers and institutions require proactive, resilience-focused insights that span day-to-day cashflow management, medium-term debt servicing, and long-term wealth accumulation.
Open Finance – the consent-driven sharing of a comprehensive array of financial data (current accounts, mortgages, loans, savings, investments, pensions, insurance, government benefits), combined with advanced Artificial Intelligence (AI) and Machine Learning (ML) techniques, offers a transformational route to truly holistic financial health evaluation. By ingesting rich, multi-dimensional data and applying explainable models, financial firms can transition from static credit assessments to dynamic, personalised guidance and recommendation engines. These engines empower consumers to build financial resilience, make informed decisions and pursue life goals with confidence.
Building on Sopra Steria and Glasgow University’s joint whitepaper “Consumers at the Heart of Innovation: Financial Health Evaluation in the UK Regulatory Landscape” and inspired by R&D collaboration between Sopra Steria and Oxford University, this whitepaper:
- Examines the scope and expected data architecture of Open Finance, extending from Open Banking to full-spectrum data sharing.
- Presents a robust data modelling framework, encompassing data acquisition, cleansing, feature engineering, supervised and unsupervised modelling, scorecard design and persona segmentation. It culminates in a composite financial health score that blends aspects like credit risk and resilience evaluation.
- Explores explainability and consumer engagement, employing data science techniques to ensure transparency and mapping various persona archetypes to tailored, sequential optimisation plans.
- Demonstrates regulatory alignment, showing how non-product-specific, personadriven guidance and recommendation can fit within the Financial Conduct Authority’s (FCA) Advice and Guidance Boundary (FG15/1) and the Consumer Duty framework.
About FRIL
Supply Chain Intelligence: Actionable Risk Assessment of Brazilian Commodity Supply Chains Using Geospatial Data
Geospatial data is transforming sustainability risk assessment in Financial Services. Driven by mandatory regulations such as the EU’s CSRD and SFDR, alongside emerging standards such as TNFD, financial institutions must now monitor not just financial performance, but real-world environmental and social impacts across global supply chains.
This white paper showcases how geospatial data and asset-level geospatial analysis can be used as a support tool for supply chain impact monitoring. Specifically, we evaluate deforestation risks in Brazilian commodity supply chains. Using publicly available datasets and Google Earth Engine, we develop a reproducible risk scoring framework, applied to over 17,000 slaughterhouse facilities, tied to 9,854 companies, across Brazil.
This analysis:
- Quantifies deforestation exposure across 12 animal-based commodities at facility and company level.
- Creates actionable risk metrics for investors, lenders, and regulators.
- Aligns outputs with ESG disclosure frameworks, including CSRD, SFDR, TNFD, and the EUDR.
- Highlights high-risk companies and regions, providing clear signals for due diligence and sustainable finance strategy.
This paper is part of a broader move toward Earth Intelligent Finance, empowering financial actors to make faster, smarter, and more transparent sustainability decisions using geospatial insight.
Mind the Gap: Bridging the UK’s pension divide with digital solutions
The UK pensions landscape is at a crossroads: with 38% of the working-age population under-saving for retirement and 52% of people accessing their pensions without adequate advice, the risk of poor financial outcomes are at an all-time high. Yet, the market is set for huge growth, with defined contribution pension assets projected to explode to £800 billion by 2030.
This is not a new problem, and despite well-intentioned efforts like auto-enrollment from policy-makers and new digital products from providers, there is still a fundamental disconnect; customers lack engagement and understanding in later life planning and financial outcomes.
Solving this challenge presents a significant growth opportunity for providers, but to do so needs a design-led approach focused on deeply understanding your customers through three core elements: Empathy, Engagement and Empowerment. Technology – and particularly AI – of course plays a crucial role, but doesn’t replace the need for empowered advisers. The future will be hybrid: a combination of traditional digital interfaces, agentic AI, and human touchpoints to create hyper-personalised experiences based on an individual’s aspirations, circumstances and preferences.
This whitepaper, drawing on digital partner CreateFuture‘s decades-long experience in the Wealth & Pensions sector, provides a compelling vision for the future of pensions engagement, outlining how a hybrid approach leveraging digital innovation, AI, and empowered advisors can create truly customer-centric experiences and unlock a more secure future for savers.
Large Language Model Application for Regulatory Horizon Scanning: Case Study on ESG Greenwashing Regulations
This white paper explores the application of Generative AI, specifically Large Language Models (LLMs), to enhance regulatory horizon scanning within financial services. Using the Financial Conduct Authority’s (FCA) 2024 anti-greenwashing rule as a case study, we demonstrate how LLMs can be integrated into the strategic foresight process to detect early regulatory signals, analyse stakeholder feedback, and forecast future regulatory developments.
Our framework builds upon the traditional horizon scanning model, comprising exploration, assessment, application, and continuation, and incorporates advanced text analysis techniques including semantic similarity testing with models such as BERT and RoBERTa.
The study shows that LLMs can significantly improve the efficiency, accuracy, and scalability of horizon scanning by extracting meaningful insights from large, unstructured datasets. The results highlight the potential of LLM-driven foresight to enhance regulatory preparedness, guide compliance strategies, and inform policy design in an increasingly complex and dynamic regulatory environment.
Sustainable Financial Products and UK Pension Schemes
Sustainable financial products have gained significant traction in the financial world as climate change and social responsibility concerns continue to dominate public discourse. In the UK, Environmental, Social, and Governance (ESG) and sustainability considerations have been steadily gaining attention as both financial product designs and risk management tools.
Economic trends, regulations, and soft laws have been reactive over the last decade to growing transparency and demands for accountability (Palea, 20221; Escrig-Olmedo, Muñoz-Torres, Fernandez-Izquierdo, 20132).
This paper explores the growing role of sustainable financial products in the UK’s Defined Contribution (DC) pension schemes. It highlights key challenges and opportunities, focusing on the interplay between sustainable investment products, pension dashboards, Fintech, and institutional perspectives.
Strategic Foresight in FinTech: Harnessing Scenario Planning for Future Readiness
Strategic foresight is an essential approach for anticipating and preparing for potential developments in a rapidly evolving ecosystem. This white paper explores the critical importance of future thinking and foresight methods in fintech ecosystem. It highlights scenario planning as a powerful tool for strategic foresight in fintech ecosystem. It examines the value of scenario planning for businesses, governments, and regulators, while addressing the challenges and limitations of its application.
The paper reviews specific use cases of scenario planning in government and financial institutions, offering insights into how it can further benefit these sectors. Ultimately, the paper calls on stakeholders to embrace future thinking and scenario planning as integral elements of their strategic planning processes.
Simplifying Compliance: The Role of AI and RegTech
The Financial Regulation Innovation Lab (FRIL) is dedicated to simplifying compliance through emerging technologies, with Artificial Intelligence (AI) representing the latest evolution in regulatory technology (RegTech). Building on previous research and industry engagement—including workshops, blogs, webinars, and a micro-credential course—this White Paper presents key considerations for the conceptualisation, design, and implementation of AI-driven compliance systems.
We begin by examining the nature of regulatory rules and the compliance process before exploring the complexities that challenge AI deployment. The discussion then shifts to Generative AI (GenAI) as a cutting-edge innovation, analysing its capabilities and relevance to compliance functions.
A focused use case on GenAI in robo-advisory services illustrates AI’s potential in asset management, where conventional AI is already well-established. Finally, we consider the broader organisational implications of AI adoption, emphasising the opportunity to view compliance as an embedded and adaptive function able to evolve and respond to changing stakeholder expectations and regulatory frameworks.
Shifting the Skills Conversation: Building a Lifelong Learning Culture to Foster Innovation in Scotland’s Financial Sector
Building a sustainable, productive and inclusive financial services sector in Scotland means thinking beyond the needs of today. ‘Fostering innovation’ requires investing in people’s ability to think broader than what’s right in front of them, and such capability to be dynamic in behaviour, knowledge and practical expertise is built through the process of learning – over and over again, exploring many different skills and interests, and throughout life.
It’s for this reason that in this white paper we propose shifting the skills conversation beyond plugging skills gaps and identifying which is the latest technical need in the workforce, and instead building a ‘lifelong learning’ culture to better foster innovation in Scotland’s financial sector, long-term.