- Increasing Focus on AI — AI developments and uses and the evolving legal and regulatory landscape may bring about new litigation and enforcement risks stemming from claims of algorithmic bias, discrimination, errors made by autonomous AI agents, fraud perpetrated using AI, misuse relating to privacy and governance, monitoring and reporting, and other areas. Evolving theories and claims, including those issues relating to information use and disclosure in the loan origination and other contexts may continue and reach across various products. Regulators may need to adapt the existing regulatory framework to meet these new challenges, creating new risks, while trying to strike a balance between a robust regulatory framework and flexibility to account for advances in technology. For example, in the United Kingdom, the Financial Conduct Authority (FCA) may not introduce additional AI regulations and might instead rely on existing frameworks, such as the UK’s Consumer Duty principles. However, new regulations such as the EU AI Act and Colorado AI Act will impose additional requirements in implementing AI. In an effort to mitigate risk and satisfy legal and regulatory expectations, global companies may wish to consider applying adequate risk identification and management; designing and implementing proper controls and oversight systems; and ensuring customer disclosures are in place. Global businesses may need to adjust to the different regulatory frameworks and expectations across jurisdictions.
Outlook 2026: Financial Services Litigation
