The Financial Conduct Authority is preparing to introduce a live artificial intelligence testing service, aimed at helping financial firms deploy AI technologies in a safe, responsible and consumer-friendly manner. The initiative is intended to bridge a regulatory testing gap that the FCA says is slowing adoption across the sector.

The proposed service will form part of the watchdog’s existing AI Lab, and is expected to go live in September 2025, initially running for 12 to 18 months.

The FCA said the live testing environment would give firms access to regulatory guidance during the final stages of AI model development and allow the regulator to gather early intelligence on the impact of AI in UK financial markets.

Jessica Rusu, the FCA’s chief data, intelligence and information officer, said: “Under our new strategy, we’ve committed to being increasingly tech positive to support growth. We want financial firms and their customers to benefit from AI, so we’re providing a safe space to test how they plan to use it.”

The announcement builds on the FCA’s recently published five-year strategy, which promises to embrace data and technology to make the regulator smarter, more agile and better equipped to support innovation. The strategy also highlights the FCA’s ambition to uphold the UK’s global competitiveness in financial services through a “tech-positive” regulatory posture.

The regulator is currently seeking feedback from firms on how the proposed testing service can best support safe and ethical deployment of AI tools within the sector. Readers may access the Engagement Paper here. The deadline for feedback is 10th June 2025:
https://www.fca.org.uk/publications/calls-input/proposal-ai-live-testing-engagement-paper

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