FCA launches new 'AI Lab' for financial services sector

The FCA has launched a new ‘AI Lab’, seeking to support innovators as they develop new AI solutions while deepening its own understanding of the risks and opportunities AI presents to the financial services sector.

The AI Lab has four components:

• AI Spotlight, providing space for firms and innovators to share real-world examples of how they are leveraging AI, and to share emerging AI solutions. A showcase day will be held on 28 January 2025, and applications are already open;
• AI Sprint, a policy sprint to be held on 29 and 30 January 2025, bringing together industry, academics, regulators, technologists, and consumer representatives to focus on how the FCA enables the safe adoption of AI in financial services. Applications will open soon, and interest can be registered now;
• AI Input Zone, an online feedback platform that will open in the coming months, where stakeholders can have their say on the future of AI in UK financial services; and
• Supercharged Sandbox, where the FCA will run AI-focused TechSprints and enhance its Digital Sandbox infrastructure through greater computing power, enriched datasets and increased AI testing capabilities.

This initiative dovetails the FCA's previously expressed commitment to monitoring the adoption of AI across UK financial markets, including keeping under review if amendments to the existing regulatory regime are needed. This commitment followed the FCA's confirmation in April 2024 that it considers the existing regulatory framework to be well-equipped to capture regulated firms' use of AI, for now

In a speech accompanying the launch of the AI Lab, Jessica Rusu, FCA Chief Data, Information and Intelligence Officer, stated that AI is a priority for the FCA and said: “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. Even some of the world’s most profusive backers of AI recognise the importance of ensuring the risks of AI are mitigated."

Up next on our radar, the FCA and Bank of England are expected to publish the third edition of their machine learning survey soon, and this will include consideration of the use of generative AI in financial services.