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FCA AI Live Testing: A Safe Place for Finance Firms to Test AI

The FCA’s AI Live Testing programme supports eligible firms preparing AI for live financial markets. Its second-cohort application window closed in March 2026.
From TheFinanceBase Team4 min to read
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The Financial Conduct Authority’s AI Live Testing programme gives eligible firms a supervised way to test AI systems in real-world conditions as they prepare for live deployment. The second cohort’s application window closed on 24 March 2026; the FCA says it will share information about future cohorts in due course. Participation is not a general approval of a product or an exemption from existing rules.

What is FCA AI Live Testing?

AI Live Testing is part of the FCA’s AI Lab. It is designed for firms with mature AI use cases that are approaching deployment in live financial markets. The FCA and its technical partner support and oversee testing so they can learn about the technology’s benefits and risks while encouraging safe, responsible innovation. The FCA’s programme page describes the service and its current status.

The FCA’s first-cohort announcement, published on 3 December 2025 and updated on 4 December 2025, named Gain Credit, Homeprotect (part of Avantia Group), NatWest, Monzo, Santander, Scottish Widows (part of Lloyds Banking Group), and Snorkl. The FCA said the participants’ use cases included AI for debt resolution or financial advice, customer engagement, complaints handling, and helping consumers make spending and saving decisions. Those examples are not a complete list, and participation does not amount to general FCA endorsement of a firm or its AI. The FCA’s announcement also identifies Advai as its technical partner, supporting testing and assurance.

Who can apply?

The FCA says the programme is for firms that produce or distribute financial products or services, or provide AI models that are material to financial services and markets. A proposed use case must actively use AI and be material and relevant to the firm’s activities. The FCA also expects a proof of concept and plans for deployment, consideration of pre-deployment testing and post-deployment monitoring, and a willingness to work with the FCA and share findings.

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The proposed use case should further at least one of the FCA’s operational objectives and have the potential to contribute positively to UK economic growth. These are programme criteria, not a guarantee that an application will be accepted. The FCA’s page says applications for cohort two opened on 19 January 2026 and closed on 24 March 2026. Testing was due to start in late April, with successful firms due to be notified in mid-April. Those dates apply to that cohort, not to an ongoing application window; check the FCA page for future cohort information.

How AI Live Testing differs from the Supercharged Sandbox

The FCA uses different programmes for different development stages. AI Live Testing is intended for firms preparing to use AI in live markets, while the Supercharged Sandbox supports earlier-stage idea development and testing.

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Programme Development stage Live-market deployment Support described by the FCA
AI Live Testing Mature use case with a proof of concept and deployment plans Intended for firms preparing for live use Testing in real-world conditions with FCA support and oversight; Advai provides technical testing and assurance support for participants
Supercharged Sandbox Earlier-stage ideas and development Not described as a live-deployment programme Access to high-performance computing, enriched datasets, and AI tools; NVIDIA partnered with the FCA to enhance the Digital Sandbox for the first cohort, which has completed

The two programmes should not be treated as interchangeable: the choice depends on whether the firm is still developing an idea or has a mature use case approaching deployment. The FCA programme page outlines the distinction.

Does participation mean the FCA has approved the AI?

No. The initiative is a testing and learning arrangement, not certification, blanket regulatory approval, or a waiver from applicable requirements. Firms remain responsible for meeting the rules and expectations that apply to their activities.

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In a blog published on 8 June 2026, the FCA said it does not plan to introduce new AI-specific regulation and will rely on existing frameworks. It points to the Consumer Duty, the Senior Managers and Certification Regime (SM&CR), and existing expectations for governance and controls. The FCA identifies practical areas firms need to address, including AI governance, model testing, monitoring outcomes, fair treatment of customers—including customers with features of vulnerability—and explaining AI-driven decisions. The FCA’s June 2026 blog sets out its approach.

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Why the FCA is testing AI in live conditions

Testing gives the FCA an opportunity to observe how AI performs in real financial-market settings and to learn about both its benefits and its risks. The FCA says this work will inform its future approach. For firms, the stated focus is not simply whether a model works technically, but whether it is governed, tested, monitored, fair to customers, and sufficiently explainable in its use.

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The FCA’s AI overview page displays figures that 75% of firms have adopted some form of AI, 84% have an individual accountable for their AI approach, and more than 200 firms have been helped by FCA AI testing and machine-learning services. The surfaced page does not state the reference year or methodology for these figures, so they should be read as figures displayed by the FCA, not as dated current survey results. The FCA’s AI overview provides the figures.

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