The Financial Conduct Authority (FCA) has announced plans for a live artificial intelligence (AI) testing service, aimed at facilitating the safe use of the technology within the financial sector.
The regulator is seeking industry feedback on the initiative, which will form a new part of its AI Lab.
The FCA said the existing AI Lab will support the safe and responsible deployment of AI by firms to achieve positive outcomes for UK consumers and markets.
The FCA also said: “AI continues to evolve swiftly, requiring an agile approach.
“As part of AI live testing, our regulatory and technical teams will work directly with firms, providing tailored support as firms develop, assess and deploy live AI models in UK financial markets.
“This will include exploring output-driven validation and other methods to evaluate the impact of AI model use in UK financial markets.
“Through AI live testing, firms will be able to live-test AI models to build confidence in their performance, while also receiving regulatory support and comfort to support safe and responsible deployment.”
The proposed live testing service is expected launch in September, with application the process to open in early summer, and would run for 12 to 18 months.
In September last year Health & Protection reported Nikhil Rathi, CEO of the FCA, warned that using artificial intelligence (AI) for insurance could leave some customers uninsurable or potentially result in discrimination.
Established proof of concept
The FCA said the process is not suitable for firms just embarking upon an early proof of concept phase, or firms making operational improvements that do not require regulatory support.
This approach is designed to maximise value for firms looking to deploy established proofs of concept, while driving innovation and supporting the FCA’s secondary growth objective, it added.
The live testing service will be a new component of the FCA’s AI lab, which has been supporting firms with the development and deployment of AI and would help to fill a testing gap slowing firms’ adoption of AI.
The live testing service aims to allow firms to collaborate with the FCA while they check that their new AI tools are ready to be used.
It would also provide the FCA with intelligence to better understand how AI may impact UK financial markets.
The live testing service will provide regulatory support to firms who are ready to deploy consumer or market-facing AI models.
Jessica Rusu, chief data, intelligence and information officer at the FCA 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.“
Feedback to the engagement paper closes on 10 June 2025.
