The Financial Conduct Authority is working with major UK finance firms, from NatWest to Monzo, to test AI in a safe place to better understand its potential benefits and risks.

The AI Live Testing initiative is the first of its kind in the financial sector to help firms who are ready to use AI in UK financial markets.

Participating firms receive tailored support from the FCA’s regulatory team and its technical partner Advai, to develop, assess and deploy safe and responsible AI.

Gain Credit, Homeprotect, part of the Avantia Group, NatWest, Monzo, Santander, Scottish Widows, part of Lloyds Banking Group, and Snorkl are the first group to take part.

AI testing can be a vital step in helping firms address key questions around evaluation frameworks, live monitoring governance and risk management to ensure that AI is deployed safely and responsibly for consumers and markets.

Many of the AI applications currently being tested as part of the project focus on retail financial services including use cases to harness AI to support debt resolution or provide financial advice.

Applications are also exploring the potential for AI to help improve customer engagement, streamline complaints handling and help consumers to make smarter spending and saving decisions.

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“Our new AI Live Testing service helps firms who are ready to use AI in live markets,”  Jessica Rusu, chief data, information and intelligence at the FCA, said. “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.”

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

AI Live Testing complements the FCA’s Supercharged Sandbox which helps firms who are in the discovery and experiment phase with AI.

Applications for the second cohort for AI Live Testing will open in January 2026 and participating firms will be able to start testing in April.