Don’t dilute and delay AI rules, reinforce safeguards to protect consumers, warns report

As industry pressure mounts, a new report from Finance Watch warns that postponing or weakening key provisions of the AI Act, particularly those covering high-risk systems, would leave consumers exposed to real and immediate harm. 

The new report ‘Protecting EU consumers in the age of AI-driven retail finance’, reveals how financial firms are already using AI systems to decide who gets a loan, how much people pay for insurance, and whether they can access a bank account, often with inadequate safeguards. 

As policymakers debate delaying or weakening the AI Act’s high-risk system rules in the name of competitiveness or simplification, Finance Watch cautions that any pause or dilution of the rules could undermine the EU’s ability to address urgent risks.

The report warns that a patchwork of outdated laws, many predating the widespread use of AI, cannot deal with the opacity, lack of explainability, and personalisation of modern AI systems. Sectoral rules like the Insurance Distribution Directive (IDD), and Markets in Financial Instruments Directive (MiFID) were never designed to govern these technologies, and cannot offer the protections or redress consumers urgently need.

Even if the AI Act is rolled out as scheduled, major blind spots remain. Key financial services like motor and home insurance, basic banking access, and retail investment advice still fall outside its core protections.