The Financial Conduct Authority (FCA) is launching an AI Lab aiming to help firms overcome challenges they face in implementing and building AI solutions, as well as supporting safe and responsible AI development.

The UK financial watchdog announced the new venture at a speech celebrating its 10th anniversary serving the country.

The AI Lab is set to play a vital role in providing insights, debates, and case studies within the realm of AI, providing a deeper understanding of AI opportunities and risks.

In her speech, Jessica Rusu, chief data information and intelligence officer at the FCA, highlighted the FCA’s dual nature when it comes to innovation

“Some see us as gatekeepers, others as enforcers,” she said.

“A wall, or teachers with red pens. And, in truth, we are at times all of those things. But our role is more nuanced, more holistic.”

She did point to the FCA’s successes in collaborating with industries, supporting companies through TechSprints, Sandboxes, and Innovation pathways.

But the majority of the speech was focused on AI.

“AI will revolutionise financial services, providing solutions to improve consumer financial inclusion, help prevent market abuse, and support the delivery of new products and services,” she said.

“And whilst we are just starting to see AI’s benefits emerge, we are clear that those benefits do not come without risks.

“As a regulator, we must play a critical role in ensuring AI is deployed in a way that is safe, fair and in the best interests of consumers and the market as a whole.”

To do this, the AI Lab will be composed on four parts, including an AI Spotlight, an AI Sprint, an AI Input Zone, and a Supercharged Sandbox and testing.

The AI Spotlight aims to bring firms together to share examples of how they are leveraging AI to lead industry growth, which they will have the opportunity to present at a showcase at the FCA London Office in January 2025.

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The AI Sprint will bring together developers from multiple sectors – public, private, academic, and regulatory – to work on enabling the safe adoption of AI in financial services.

The Input Zone will invite stakeholders to have a say on the future of AI by providing feedback online, via a platform that will open next month.

In the Supercharged Sandbox, the FCA will run techsprints focussed on AI to enhance their digital sandbox infrastructure with greater computing power, better datasets, and increased AI testing abilities.

“It’s a chance for us to work together to shape the future of AI in financial services, providing us with a practical understanding of AI usage, and helping to inform the FCA’s policy approach,” Rusu said of the lab.