FCA Launches Live AI Testing to Boost Innovation

The Financial Conduct Authority (FCA) is inviting feedback from firms as it prepares to launch a new live AI testing service aimed at supporting the safe and responsible deployment of artificial intelligence across UK financial services. The initiative seeks to fill a critical testing gap that has been slowing AI adoption, offering a collaborative environment where firms can validate their AI models with regulatory oversight before bringing them to market.

The live AI testing service will form a key component of the FCA’s expanding AI Lab, which has been supporting firms with AI development and deployment. Through the new service, firms that are ready to introduce consumer-facing or market-facing AI models will be able to work directly with the FCA. This engagement will help firms ensure that their AI solutions meet regulatory expectations while maintaining high standards of consumer protection and market integrity. The programme is scheduled to run for a period of 12 to 18 months, with a planned launch in September 2025.

This new initiative represents a significant advancement of the FCA’s tech-positive agenda and is firmly aligned with its new five-year strategy. The strategy focuses on enabling innovation and growth within the financial services sector while reinforcing the global competitiveness of the UK market. By creating a safe space for firms to test their AI models, the FCA will not only support the responsible adoption of AI but also gather valuable intelligence about emerging technologies and their potential impacts on the financial system.

Jessica Rusu, the FCA’s Chief Data, Intelligence and Information Officer, emphasised the importance of this initiative, stating:

Under our new strategy, we have committed to being increasingly tech positive to support growth. We want financial firms and their customers to benefit from AI, so we are providing a safe space to test how they plan to use it.

The live AI testing service is intended for firms that are ready to deploy AI models designed for direct consumer use or those that could affect market operations. This regulatory collaboration will help firms mitigate risks before launch, supporting innovation without compromising consumer trust or market stability. The FCA’s proactive approach reflects its ambition to be a smarter, more data-driven regulator that can operate more effectively and efficiently in a rapidly evolving technological environment.

Firms interested in participating or sharing their views are encouraged to respond to the FCA’s Engagement Paper. Feedback is open until 10 June 2025, providing firms with the opportunity to influence the design and development of the live AI testing service before its formal introduction later this year.

The launch of the live testing service marks a pivotal moment for the UK’s financial services sector. By fostering a controlled environment for AI deployment, the FCA aims to unlock the benefits of artificial intelligence while ensuring that innovation delivers positive outcomes for consumers, markets and firms alike.

Read the press release here.