FCA Announces Second Cohort for AI Live Testing

WHY THIS MATTERS: The FCA’s second cohort announcement for AI Live Testing signals a crucial pivot point for the UK’s financial services sector. This initiative moves beyond theoretical discussions of artificial intelligence and into the practical, governed integration of complex models—such as agentic AI and neurosymbolic AI—into core banking functions. With major institutions like Barclays, Experian, and UBS participating, the industry is tacitly acknowledging that the commercial use of next-generation AI is imminent, but must be paired with stringent AI assurance. This regulatory oversight, conducted in collaboration with specialist partners, provides a critical framework for safe deployment, ensuring that innovations in credit scoring, anti-money laundering, and targeted investment support do not compromise consumer safety or market integrity. For businesses, the program results will set a crucial benchmark for risk management and operational standards necessary to leverage AI for competitive advantage in a highly regulated landscape.

Speaking at UK FinTech Week, Jessica Rusu, chief data, information and intelligence officer at the FCA has confirmed the second group of firms selected to join AI Live Testing. 

Eight new firms, including Barclays, Experian, Lloyds Banking Group (Scottish Widows), and UBS, have been chosen by the Financial Conduct Authority (FCA) to live test AI applications to support safe and responsible deployment. 

The FCA is working with its technical partner Advai, a London-based specialist in automated AI assurance, to provide AI Live testing. This initiative helps successful applicants explore key questions around risk management and live monitoring to support the responsible deployment of AI for consumers and markets.  

Applications reflect the fast-evolving nature of the technology, with a diverse range of AI models underpinning use cases – from agentic AI and small language models to emerging solutions such as neurosymbolic AI. Firms in the second group are testing both customer-facing and business‑to‑business use cases, including AI-enabled targeted support for investments, credit score insights for consumers, agentic payments, anti-money laundering detection, and Know Your Customer. 

“We’re continuing to collaborate with firms to support the safe and responsible development of AI in UK financial markets,” said Jessica Rusu, chief data, information and intelligence officer at the FCA.

“With tailored support from the FCA and Advai, the initiative reflects our commitment to supporting the pace of change in AI, whilst demonstrating how regulators and industry can work together to harness innovation responsibly.” 

The FCA will also publish a Good and Poor Practice report for AI in financial services later this year to support firms in the safe and responsible adoption of the developing technology. 

The announcement coincides with the publication of the FCA’s Innovation Insights Report, which highlights how FinTech innovation is evolving in the UK and what the regulator is learning from firms engaging with its innovation services. 

The FCA’s Regulatory Sandbox and Innovation Pathways saw a 49 per cent increase in applications on the previous year. 

The report also shows that FinTech market activity closely matches demand for the FCA’s innovation services, particularly in fast-growing areas like AI. 

Applications for the AI Live Testing second cohort opened in January 2026, with firms beginning testing in April. Testing will conclude by the end of the year, with an evaluation report published in Q1 2027. 

FF NEWS TAKE: Absolutely, this moves the needle. The inclusion of use cases like agentic payments and neurosymbolic AI confirms that the UK is actively testing the most advanced AI technologies under real-world conditions. This structured approach to safe deployment should accelerate industry trust and adoption. The critical next step will be the FCA’s forthcoming Good and Poor Practice report, which will effectively serve as an early-stage blueprint for all financial institutions navigating the AI regulatory landscape globally.