UK’s Financial Conduct Authority (FCA) has unveiled an AI Live Testing initiative, partnering with major banks and fintechs to safely trial AI systems in real market conditions.

Announced December 3, the scheme aims to give regulators a deeper understanding of the risks and benefits of AI while helping firms deploy the technology responsibly across the financial sector. The program is the first of its kind in UK finance.

Participating firms — including NatWest, Santander, Monzo, and subsidiaries of Lloyds Banking Group and Avantia Group — will work directly with FCA specialists and the regulator’s technical partner, AI assurance firm Advai.

The first cohort will explore issues such as how to build effective evaluation frameworks, how to govern live AI monitoring, and how to manage risks as machine-learning tools become more deeply embedded in banking.

Many of the projects involve retail financial services, with early use cases ranging from AI-supported debt resolution and financial guidance to enhanced customer engagement systems.

The FCA said the initiative is intended to prepare industry and regulators alike for the widespread adoption of AI in financial services — and ensure innovation does not come at the cost of consumer protection or market integrity.