Revealed by Jessica Rusu, the FCA’s chief data, information and intelligence officer, at UK FinTech Week, the initiative is being delivered in partnership with Advai, a London-based specialist in automated AI assurance. Together, the FCA and Advai are helping participating firms address key questions around risk management and live monitoring to support the responsible deployment of AI across consumer and market contexts.

The range of technologies under examination reflects how rapidly the sector is evolving. Firms are testing diverse AI models – from agentic AI and small language models to emerging approaches such as neurosymbolic AI – across both customer-facing and business-to-business applications. Use cases include AI-enabled investment support, credit score insights for consumers, agentic payments, anti-money laundering detection, and Know Your Customer processes.

Ms Rusu said: “With tailored support from the FCA and Advai, the initiative reflects our commitment to supporting the pace of change in AI, whilst demonstrating how regulators and industry can work together to harness innovation responsibly.” 

The FCA also intends to publish a Good and Poor Practice report on AI in financial services later this year to help firms navigate the technology’s adoption safely.

The announcement coincides with the publication of the FCA’s Innovation Insights Report, which charts the evolution of FinTech innovation in the UK. The regulator noted a 49% rise in applications to its Regulatory Sandbox and Innovation Pathways compared to the previous year, with demand closely mirroring activity in fast-growing areas such as AI.

Applications for the second AI Live Testing cohort opened in January 2026, with testing now under way following an April start. The programme is expected to conclude by the end of the year, with an evaluation report due in the first quarter of 2027.