The UK FCA is preparing to roll out a new live testing service for AI, designed to help financial firms deploy AI tools in a responsible and secure manner.
As part of its AI Lab initiative, this proposed service will offer regulatory support and a collaborative testing environment, ensuring firms can validate their AI solutions before rolling them out to the market.
Scheduled for launch in September 2025, the service is expected to run for a period of 12 to 18 months. It will enable firms developing consumer- or market-facing AI models to work closely with the FCA as they test their technologies in real-time. The initiative is aimed at closing a critical testing gap that has been slowing the adoption of AI across the UK financial sector.
By engaging directly with firms during the testing phase, the FCA also intends to gain deeper insights into the implications of AI on UK financial markets. The regulatory body believes this will allow it to craft more informed and effective oversight strategies as AI becomes more embedded in the financial services landscape.
The live AI testing service forms a core element of the FCA’s new five-year strategy, which emphasises a “tech-positive” stance. The strategy commits the FCA to promoting innovation and competitiveness within the UK’s financial services industry by leveraging technology and data to enhance regulatory efficiency and market oversight.
FCA chief data, intelligence and information officer Jessica Rusu 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.”
Firms and stakeholders have until 10 June 2025 to provide feedback on the Engagement Paper outlining the live testing proposal. The FCA has encouraged participation from all parts of the financial services ecosystem to ensure the framework supports both innovation and consumer protection.
The FCA previously announced an array of initiatives aimed at bolstering innovation and streamlining the regulatory process for emerging firms.
As part of its 2025-2026 work programme, the FCA is set to deploy smarter regulatory strategies that not only foster growth but also bolster consumer protection and crime prevention.
A cornerstone of the FCA’s new strategy involves the augmentation of its Regulatory Sandbox, which has been pivotal since its inception in 2016. To date, the sandbox has facilitated 195 firms in safely testing and deploying innovative products tailored for UK consumers.
Additionally, the FCA also previously launched an ambitious 5-year strategy aimed at transforming the landscape of financial regulation in the UK.
This comprehensive plan is designed to enhance operational efficiency, support sustained economic growth, and deepen consumer trust in financial services. At the core of the FCA’s strategy are four primary goals: becoming a smarter regulator by being predictable, purposeful, and proportionate; supporting economic growth through innovation and investment; aiding consumers in navigating their financial journeys with enhanced trust and innovative products; and intensifying efforts to combat financial crime, particularly targeting those misusing their regulatory status.
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