The Financial Conduct Authority (FCA) has launched a consultation on how its live artificial intelligence (AI) testing service can help firms deploy “safe and responsible” AI that benefits markets and consumers.

The service will enable firms to collaborate with the FCA while they check whether their new AI tools are ready to be used, and provide the regulator with information that will be used to better understand how AI could impact financial markets in the UK.

As part of the FCA’s AI Lab, which supports firms with the development and deployment of AI, the service will aim to “fill a testing gap” that is slowing firms’ adoption of AI.

The FCA will provide regulatory support to firms ready to deploy market- or consumer-facing AI models through the live testing service, which the regulator plans to launch from September 2025 for 12 to 18 months.

The FCA said the proposal built on its five-year strategy, which outlined how the regulator planned to support growth by enabling innovation and ensuring the competitiveness of the UK’s financial services through the use of technology.

Commenting on the consultation launch, FCA chief data, intelligence, and information officer, Jessica Rusu, said: “Under our new strategy, we’ve committed to being increasingly tech positive to support growth.

“We want financial firms and their customers to benefit from AI, so we’re providing a safe space to test how they plan to use it.”

Avaloq managing director for the UK and Ireland, Suman Rao, stated: “The FCA’s planned testing service for AI models is a clear sign of the regulator’s commitment to supporting responsible innovation across the financial services industry.

"By offering clarity and a regulated testing service, it will provide a safety net for wealth managers looking to leverage AI to support their business and client needs.

“Our industry research shows that while wealth managers are eager to adopt AI, many are held back by a lack of client trust. Around a quarter believe clients could never trust AI for investment decisions (24 per cent), with a similar proportion saying the same about financial planning (27 per cent).

"We believe today’s announcement will provide reassurance by offering a platform to help firms test and implement AI responsibly and, in doing so, build greater client confidence.

“While the FCA’s initiative will help build trust and give firms the confidence needed to roll out AI initiatives, it is unlikely that investors will ever feel comfortable fully delegating decisions to AI.

"Firms should therefore focus on how AI can support advisers and relationship managers in scaling their personalised service, ensuring the personal touch that clients value most can be delivered effectively to a larger client base.”

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