SMCR and AI Accountability

The Senior Managers and Certification Regime (SMCR) imposes personal accountability on named individuals for the activities and systems within their area of responsibility. As AI models increasingly drive material decisions in credit, fraud, pricing, and customer outcomes, the FCA has made clear that Senior Managers cannot delegate accountability for AI governance. Where an AI system produces outcomes that harm customers or breach regulatory requirements, the Senior Manager in whose remit that system falls is personally accountable.

Under SMCR, firms must maintain Statements of Responsibilities (SoRs) for each Senior Manager that explicitly cover material AI and algorithmic systems. The FCA’s expectations, reinforced through SS1/23, require that accountable Senior Managers can demonstrate they understood the risks of each AI model, received adequate management information about model performance, and took reasonable steps to address identified concerns. Firms without systematic AI governance infrastructure struggle to produce this evidence when the FCA requests it.

Audital provides a dedicated SMCR accountability module that assigns each registered AI model to a named Senior Manager, records all governance actions taken, and generates a personal accountability trail that can be presented in a supervisory review or enforcement investigation. When a model produces an adverse outcome, the full chain of decisions and approvals is immediately accessible and cryptographically verifiable.

Personal Liability and AI Governance

The FCA has signalled that SMCR enforcement related to AI governance is an increasing priority. Senior Managers who cannot demonstrate active oversight of AI systems in their remit face significant personal risk. Audital’s SMCR accountability layer creates a verifiable record that protects individuals as well as the firm, transforming AI governance from a documentation burden into a defensible record of professional conduct.