FCA launches AI Live Testing with major UK banks to deploy AI under regulatory supervision

FCA Begins AI Live Testing with Seven Financial Firms

The FCA has officially launched its AI Live Testing program, allowing financial firms in the UK to deploy AI applications in live market conditions under regulatory supervision 1

1

. The first cohort includes NatWest, Monzo, Santander, Gain Credit, Homeprotect (part of Avantia Group), Scottish Widows (part of Lloyds Banking Group), and Snorkl 2

2

. This initiative, first announced in April, marks a significant shift in how regulators approach responsible AI innovation in the financial sector 1

1

.

Participating firms receive tailored support from the FCA's regulatory team and its technical partner Advai to develop, assess, and deploy safe AI systems 1

1

. Jessica Rusu, chief data, information and intelligence officer at the FCA, emphasized that the service helps firms ready to use AI in live markets while ensuring safe and responsible deployment across UK financial markets 1

1

.

Live Testing of AI Applications Focuses on Retail Financial Services

Many AI applications currently being tested focus on retail financial services, with use cases designed to harness AI for debt resolution and provide financial advice 1

1

. The applications also explore AI's potential to improve customer engagement, streamline complaints handling, and help consumers make smarter spending and saving decisions 1

1

. Working under FCA and Advai supervision, firms will evaluate how AI performs on fairness, accuracy, consumer outcomes, and operational resilience 2

2

.

The program represents a practical evolution from earlier regulatory initiatives. In June 2025, the FCA launched a Supercharged Sandbox in partnership with Nvidia, giving firms access to advanced computing infrastructure and regulatory guidance in a controlled environment 2

2

. AI Live Testing now enables firms to move beyond prototypes and test AI in live operations under supervised, regulated conditions 2

2

.

Regulatory Supervision Shifts Toward Collaborative Oversight

FCA chief executive Nikhil Rathi signaled a change in regulatory posture, stating that there needs to be a different relationship between regulator and regulated 2

2

. "We are not going to come after you for everything that goes wrong. What we will be concerned about is egregious failures that are not dealt with," Rathi said, underscoring the FCA's effort to foster a climate where firms can deploy AI while openly engaging regulators on risks and unexpected model behavior 2

2

.

This approach matters because it addresses a fundamental tension in AI regulation: how to enable innovation while maintaining consumer protection and market integrity. By allowing real-world testing under supervision, the FCA can generate insights into how AI affects market behavior, operational risk, and consumer outcomes—data that could inform future regulation 2

2

.

What Comes Next for AI in UK Financial Markets

Applications for the second cohort will open in January 2026, with testing expected to begin in April 1

1

2

2

. The FCA plans to publish a full evaluation after 12 months of testing, which will likely shape how AI deployment is governed across the financial sector 2

2

. Firms considering AI adoption should watch for emerging patterns around fairness metrics, accuracy benchmarks, and operational safeguards that prove effective in live environments. The program's success could also influence how other regulators globally approach AI oversight, particularly in balancing innovation with risk management in customer-facing applications.