The UK’s Financial Conduct Authority (FCA) has begun live testing of artificial intelligence in banking, with a first cohort of major financial services firms set to explore safe, responsible AI deployment in real-world environments.
The initiative, which was initially unveiled in April, will see NatWest, Santander and Monzo among the first organisations moving AI tools from controlled pilots into live market conditions, said Finextra.
The programme will provide bespoke support from the FCA’s regulatory specialists and its technical partner Advai. Participating companies include Gain Credit, Homeprotect part of the Avantia Group, NatWest, Monzo, Santander, Scottish Widows part of Lloyds Banking Group, and Snorkl. The focus is on practical applications for retail financial services, with a number of early use cases centred on debt resolution and financial advice. The FCA says many firms are exploring how generative AI can improve customer engagement, accelerate complaints handling and help consumers make informed decisions around saving and spending.
A key aim of the AI Live Testing initiative is to guide firms toward safe implementation of machine learning models while ensuring compliance with regulatory expectations. The move reflects growing concern over the risks posed by emerging AI systems in consumer finance, as well as the potential benefits of automation for service delivery and operational efficiency.
FCA chief data, information and intelligence officer Jessica Rusu said, “Our new AI Live Testing service helps firms who are ready to use AI in live markets. By working closely with firms and our technical partner Advai, we’re helping to make sure that AI is developed and deployed safely and responsibly in UK financial markets.”
The FCA confirmed that applications for the second cohort of AI Live Testing will open in January 2026, with successful applicants beginning live experimentation in April. The regulator intends for the programme to widen participation across the sector over time, reinforcing its stance that AI innovation must be balanced with consumer protection and robust governance.
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