FCA Unveils Major Update on Live AI Testing for UK Financial Institutions

UK Regulator to Introduce Live AI Testing Lab for Publicly Listed Firms

The Financial Conduct Authority (FCA) is set to unveil a live artificial intelligence testing service in September 2025, providing UK financial institutions with a unique opportunity to evaluate their AI models under regulatory supervision before they launch publicly.

This initiative aims to assist companies in the safe and responsible deployment of consumer and market-facing AI applications, while also granting the FCA crucial insights into the transformative potential of artificial intelligence in financial markets.

As AI increasingly plays a pivotal role in areas such as fraud detection and investment analysis, regulatory frameworks are still evolving. Through this live testing environment, the FCA intends to bridge the “testing gap,” ensuring that AI tools are safe, compliant, and effective prior to their market introduction.

Photo by Growtika on Unsplash

• The service will operate for 12 to 18 months as part of the FCA’s expanding AI Lab.
• Firms will work closely with the FCA to assess the performance of their AI systems in a controlled, live setting.
• The FCA will gather real-time intelligence to monitor risks and enhance its understanding of AI’s effects on UK markets.

The FCA will offer ongoing guidance to help firms align their AI initiatives with compliance standards and consumer protection measures.

Jessica Rusu, FCA’s Chief Data, Intelligence and Information Officer, commented: “Our new strategy aims to be increasingly tech-positive to support growth. We want financial firms and their clients to benefit from AI, which is why we’re providing a secure environment for testing its applications.”

Components of the Plan

This testing service aligns with the FCA’s five-year strategic plan, focusing on modernizing financial oversight, fostering innovation, and maintaining the competitiveness of the UK’s financial services sector. It is part of broader initiatives, including the My FCA portal for streamlined regulatory reporting and a forthcoming crypto