Published by Global Banking & Finance Review®
Posted on September 23, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleBank of England's Bailey advocates for AI in financial regulation to enhance oversight and prevent risky behavior.
(Reuters) -Bank of England Governor Andrew Bailey said on Monday that he and other regulators who oversee the financial services industry should use artificial intelligence to help them spot problems among the firms that they supervise.
"I think we've all got to invest heavily in data and data science, and techniques," Bailey said during a discussion about financial regulation organised by the London School of Economics.
He said central banks and other watchdogs gather up vast amounts of data but "none of us, I think, can put our hand on our heart to say that we're sort of optimally using it all."
“It also creates the danger for the authorities that you’ve got the evidence in the building and you haven’t been able to use it and it subsequently comes out that somewhere in your system was the smoking gun,” Bailey added. “That’s a recurring concern for all of us.”
Bailey used his appearance at the LSE to repeat his view that calls for a cutting back of regulation of the financial sector should not lead to a return to risky behaviour in the financial services industry that could put the broader economy at risk.
Bailey said in July he disagreed with Finance Minister Rachel Reeves’ description of regulation as a "boot on the neck of businesses" and he defended rules for the banking sector which are overseen by the BoE.
(Reporting William Schomberg and Muvija MEditing by Marguerita Choy)
Artificial intelligence (AI) refers to the simulation of human intelligence in machines programmed to think and learn. It is used in various applications, including financial regulation, to analyze data and identify patterns.
Financial regulation involves the rules and laws that govern financial institutions and markets. It aims to maintain stability, protect consumers, and ensure fair practices within the financial system.
Data science is a multidisciplinary field that uses scientific methods, algorithms, and systems to extract knowledge and insights from structured and unstructured data. It plays a crucial role in decision-making processes.
Risk management is the process of identifying, assessing, and controlling threats to an organization's capital and earnings. It is essential in the financial sector to mitigate potential losses.
Regulatory oversight refers to the supervision and enforcement of laws and regulations governing financial institutions. It ensures compliance and protects the integrity of the financial system.
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