Bailey: AI Needs Rigorous Testing. Financial Advisors? Nah, They're Fine.

Andrew Bailey, the Bank of England governor, has declared that regulating artificial intelligence is “not the right place to start” when it comes to financial oversight. Instead, he insists AI needs “rigorous” testing and safeguards. Fair point — except the financial system already employs thousands of humans who make decisions based on lunar cycles, the colour of their ties, and whether Mercury is in retrograde.

Consider the irony. We are about to spend millions vetting algorithms that can at least be audited, debugged, and forced to explain their reasoning. Meanwhile, your financial advisor confidently recommends you avoid tech stocks because “they always crash in September,” or suggests moving your pension into cryptocurrency because “everyone’s talking about it at the golf club.”

AI hallucinations are a genuine concern. So are humans who hallucinate that past performance predicts future results, or who believe their gut feeling about market timing is a strategy rather than gambling with a retirement account.

Bailey is right that AI needs safeguards — it does. But let’s be honest about what actually needs regulating: the flesh-and-blood financial professionals who charge you 1.5% annually to underperform the index while assuring you they have “a special process.” Algorithms can be fixed. Overconfidence is forever.

Maybe the real regulation should start with requiring financial advisors to pass the same rigour we are about to impose on machine learning. Until then, we are worried about the wrong kind of artificial.