UK Regulator FCA Launches Supervised AI Trials for Banks

The Financial Conduct Authority launched a new initiative on Wednesday (Dec. 3) to give U.K. financial firms a “safe space” to test artificial-intelligence systems in live markets under regulatory supervision. The program, called AI Live Testing, pairs participating firms with the FCA and its technical partner Advai to deploy AI tools in real-world conditions while monitoring performance, risks and consumer impact.

From Sandbox to Live Markets

AI Live Testing builds on the FCA’s earlier efforts to foster innovation while maintaining oversight. In June 2025, the FCA launched a Supercharged Sandbox in partnership with Nvidia, giving firms access to advanced computing infrastructure, regulatory guidance, and a controlled environment in which to experiment with AI prototypes. That sandbox welcomed firms that “lack the capabilities to do so,” according to FCA Chief Data Officer Jessica Rusu, as reported by PYMNTS .

In October 2025, the FCA further expanded its innovation agenda by joining forces with Raidiam to help firms simulate and test data-sharing flows under open-finance frameworks. This step reflects the broader shift toward open data and smarter financial services infrastructure.

AI Live Testing now represents the next phase of that trajectory: rather than just experimenting with AI in a sandbox or data-sharing overlays, firms can test AI in live operations under supervised, regulated conditions.

The shift reflects a change in regulatory posture. “There needs to be a different relationship between regulator and regulated,” FCA chief executive Nikhil Rathi said. “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.” His comments underscore the FCA’s effort to foster a climate in which firms can deploy AI while openly engaging regulators on risks, flaws, and unexpected model behavior.

First Cohort Will Test Real-World Use Cases

The first group of firms accepted into AI Live Testing includes NatWest, Monzo, Santander, Gain Credit, Homeprotect (part of Avantia Group), Scottish Widows (part of Lloyds Banking Group), and Snorkl. The firms plan to deploy AI in customer-facing areas, including debt resolution, financial advice, customer service automation, complaint handling, and personalized spending and savings guidance. Working under the supervision of the FCA and Advai, firms will evaluate how AI performs on fairness, accuracy, consumer outcomes and operational resilience.

FCA officials said the program will help generate insights into how AI affects market behavior, consumer protection, operational risk, and could inform future regulation. Jessica Rusu said the FCA intends for AI Live Testing to support the responsible deployment of AI while enabling innovation and growth across the financial sector.

Applications for the second cohort will open in January 2026, with testing expected to begin in April. The FCA plans to publish a full evaluation after 12 months of testing.