UK lenders are already detecting mortgage fraud involving AI, according to Brightstar’s warning, while the regulatory response is still catching up. For advisers, the immediate risk is not only sophisticated fake documents but also impersonation, altered bank statements and client communications that appear increasingly credible.
Firms should strengthen verification and escalation processes without treating automation as a substitute for judgement. The Financial Stability Board’s AI risk-management principles reinforce the need for board accountability, human oversight, data governance and third-party supplier controls. Review how staff validate documents, protect client data and record rationale where AI tools support case preparation or communications.