In a speech to be given Wednesday, Rathi highlights the productivity benefits for the financial sector, while warning of the risks posed by the use of automated trading robots in financial markets and of unwanted outcomes from biased datasets.

“The use of AI can both benefit markets and can also cause imbalances and risks that affect the integrity, price discovery and transparency and fairness of markets if unleashed unfettered,” he says, warning bosses that they will be held accountable for decision taken by artifical intelligence bots at their firms.

Further risks come from the ability of AI to mimic language, audio and video.

Rathi cites a 'deepfake' video of trusted personal finance campaigner Martin Lewis supposedly selling speculative investments.

“As AI is further adopted, the investment in fraud prevention and operational and cyber resilience will have to accelerate simultaneously,” he says. “We will take a robust line on this - full support for beneficial innovation alongside proportionate protections.”

Rathi also used the speech to announce a call for further input on the role of Big Tech firms as gatekeepers of data and the implications of the ensuing data-sharing asymmetry between Big Tech firms and financial services firms.

"We are also considering the risks that Big Tech may pose to operational resilience in payments, retail services and financial infrastructure," he says. "And we are mindful of the risk that Big Tech could pose in manipulating consumer behavioural biases."

Rathi is concerned about the risks to normal financial market functioning in the face of the entrenched power of Big Tech firms.

"What does it mean for competition if Big Tech firms have access to unique and comprehensive data sets such as browsing data, biometrics and social media?" he asks. "Coupled with anonymised financial transaction data, over time this could result in a longitudinal data set that could not be rivalled by that held by a financial services firm and it will be a data set that could cover many countries and demographics."

Rathi additionally highlighted work by the FCA together with the Bank of England and the Prudential Regulatory Authority to set standards for service by third party providers to UK financial firms, with a particular focus on cloud providers.

"As of 2020, nearly two thirds of UK firms used the same few cloud service providers," he says. "We must be clear where responsibility lies when things go wrong. Principally this will be with the outsourcing firm, but we want to mitigate the potential systemic impact that could be triggered by a critical third party."