FCA urges fintechs to design AI around customer needs

The Financial Conduct Authority has published examples of good practice and areas for improvement in the financial services sector's use of artificial intelligence. A fintech and payments specialist said the findings show firms should begin product development with customer needs.

The regulator said firms need to define those needs before developing products, maintain effective oversight and ensure operational resilience in their use of AI.

Sophie Njagi, Chief Executive Officer of EQWIRE, said the industry's enthusiasm for AI could distract from the practical work of building services that customers need and can depend on.

Her comments come as financial firms face growing scrutiny over how they design and deploy AI tools in customer-facing products and internal operations. The FCA's observations place customer outcomes and governance alongside technical development.

"Products can look impressive in a demonstration but struggle when customers start using them at scale," said Sophie Njagi, Chief Executive Officer of EQWIRE. "The test is whether they solve a meaningful problem, make the customer's experience simpler and have the operations behind them to deliver reliably.

"The FCA's findings reinforce why these fundamentals matter. As more businesses explore what AI can do, they need to remain clear about what customers actually need."

Five principles

Njagi set out five principles that she said should guide technology product development in fintech. The first is to solve a real problem rather than follow a market trend.

She said products achieve sustained adoption only when they give customers a strong reason to change established behaviour. That requires a clear view of where current services fall short and whether a new offering provides a meaningful improvement.

The second principle focuses on operations rather than appearance. In her view, product quality depends from the outset on systems and processes that can cope with growth and unexpected events, not just on a polished interface.

That emphasis aligns with the FCA's warning on operational resilience. For financial services groups, resilience has become a central issue as digital products scale and firms rely more heavily on automated systems.

Njagi's third point was that the customer experience should remain simple. She said extra features and choices should justify their inclusion by helping users achieve a clear goal, rather than shifting complexity onto them.

Team and change

Her fourth principle concerned internal culture. She said teams that feel ownership of a product are more likely to spot problems early, think through unusual scenarios and challenge decisions when something appears wrong.

The fifth was adaptability. Njagi said technology, regulation and customer behaviour can shift quickly, requiring businesses to change direction without losing sight of their purpose and values.

These themes reflect wider tensions in fintech, where firms are under pressure to innovate while also meeting regulatory expectations on governance, risk and customer protection. AI has added to that pressure by increasing both the pace of experimentation and the complexity of oversight.

Njagi's background spans electronic money institutions, payment service providers, banking and crypto-adjacent businesses. She also has experience in anti-money laundering, compliance and risk management, areas that remain closely tied to how financial firms assess new technologies.

The FCA's latest examples of good and poor practice suggest it expects firms to treat AI as part of their broader responsibility to customers rather than as a separate technical project. That approach places product design, oversight and resilience at the centre of decision-making.

"Ultimately, lasting innovation depends on turning technological capability into products that earn customers' trust through the problems they solve and the reliability with which they solve them," said Njagi.