TL;DR

The FCA has launched the first AI Live Testing initiative in the financial sector, working with major firms including NatWest, Monzo and Santander to deploy AI safely in UK financial markets. Applications for the second cohort open in January 2026.

A New Framework for Safe AI Deployment

The Financial Conduct Authority is working with major financial institutions to test AI in controlled conditions, helping firms understand both the potential benefits and risks of the technology. The AI Live Testing initiative is the first of its kind in the financial sector.

Participating firms receive tailored support from the FCA’s regulatory team and its technical partner Advai—a UK-based company specialising in automated testing and assurance of AI systems. The goal is to develop, assess and deploy safe and responsible AI.

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

Practical Applications Taking Shape

The initiative is addressing fundamental questions around evaluation frameworks, live monitoring, governance and risk management to ensure AI is deployed safely for both consumers and markets.

Many of the AI applications being tested focus on retail financial services. Use cases include harnessing AI to support debt resolution, provide financial advice, improve customer engagement, streamline complaints handling, and help consumers make smarter spending and saving decisions.

Jessica Rusu, Chief Data, Information and Intelligence Officer at the FCA, said: “Our new AI Live Testing service helps firms who are ready to use AI in live markets. 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.”

Looking Forward

The project will help the FCA better understand how AI could shape UK financial markets and inform its future regulatory approach.

AI Live Testing complements the FCA’s existing Supercharged Sandbox, which supports firms still in the discovery and experimentation phase with AI. Applications for the second cohort will open in January 2026, with testing beginning in April.

For financial services firms considering AI deployment, this initiative signals the regulator’s willingness to work collaboratively rather than impose restrictive rules—a pragmatic approach that may accelerate responsible adoption across the sector.

Source: Financial Conduct Authority