SM&CR

The Senior Managers and Certification Regime (SM&CR) is the UK financial services accountability framework that requires named senior individuals to take personal responsibility for the areas they oversee, with regulators able to hold them to account if those areas fail. For AI governance, it means that a firm deploying AI in lending, trading, or customer decisions must be able to name the senior manager accountable for those systems and show how that person oversees them. Compliance officers and general counsel at UK-regulated firms should treat it as a direct source of personal liability for AI-related failures, not just a corporate one.

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ResearchUK2026-10-24

FCA Finds UK Firms Deployed AI Before Governance Was in Place

The UK Financial Conduct Authority published findings in October 2026 showing that regulated firms routinely deployed AI systems before establishing accountability, risk management, or oversight structures. Deloitte's analysis of those findings identifies five control gaps that supervisors will now use as a benchmark. FCA-regulated firms face direct supervisory exposure if they cannot demonstrate these controls exist.

FCA UK financial services accountability SM&CR AI risk management pre-deployment governance model risk