The Financial Conduct Authority (FCA) is to work alongside financial services firms to test artificial intelligence (AI) and better understand its potential benefits and risks.

The regulator’s AI live testing initiative will be the first of its kind in the financial sector and is aiming to help firms which are ready to use AI in UK financial markets.

Gain Credit, Homeprotect part of the Avantia Group, NatWest, Monzo, Santander, Scottish Widows part of Lloyds Banking Group and Snorkl are the first group of companies to take part. These participating firms will receive tailored support from the FCA’s regulatory team and its technical partner, Advai, to develop, assess and deploy AI responsibly.

The FCA suggested that AI testing would help firms to address questions around evaluation frameworks, live monitoring governance and risk management, to ensure that AI is deployed safely for both consumers and markets.

Many of the AI applications currently being tested as part of the project are focusing on retail financial services, including use cases to harness AI to support debt resolution or provide financial advice. Applications are also exploring the potential for AI to help improve customer engagement, streamline complaints handling as well as help consumers to make smarter spending decisions.

“Our new AI live testing service helps firms who are ready to use AI in live markets,” commented chief data, information and intelligence officer at the FCA, Jessica Rusu.

“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.”

Applications for the second cohort for AI live testing will open in January 2026 and participating firms will be able to start testing from April.

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