FCA summary of AI Sprint

The UK Financial Conduct Authority (FCA) has published a summary of its AI Sprint, a two-day event that was hosted in January which discussed the opportunities and challenges of AI in financial services. 115 participants took part, discussing how AI may develop in financial services over the next five years, and the FCA's role enabling firms to embrace the benefits of AI while also managing the risks. Four common themes came from participants' discussions and suggestions:

• Regulatory clarity. Participants emphasised the importance of firms understanding how current regulatory frameworks apply to AI. Teams proposed specific areas where the FCA could clarify or expand on existing requirements to help firms understand regulatory expectations and to support beneficial innovation.
• Trust and risk awareness. Participants recognised the importance of trust in AI as vital for its successful adoption and discussed that if firms and consumers felt able to trust AI, they might utilise it more, including seniors buying into new AI use cases and consumers engaging with new offerings.
• Collaboration and coordination. Participants stressed the importance of all parties involved in AI working together to develop solutions, including domestic and international regulators, government, financial services firms, academics, model developers and end users.
• Safe AI innovation through sandboxing. Participants appreciated the necessity for a safe testing environment to foster responsible innovation. They suggested using the FCA's sandboxes and innovation services to create this safe space, along with providing access to datasets for innovators to develop and improve AI solutions.

The Sprint also focused on participants exploring two main phases of AI: (i) the next five years of AI in financial services, exploring how advancements in agentic AI could help personalise and scale-up consumers' interactions with financial services, leading to better outcomes, and increasing automation for firms could boost efficiency and effectiveness in processes, including regulatory compliance, enhance fraud detection and help customer support agents; and (ii) the current financial services regulatory regime, assessing areas where further clarity would be beneficial. The summary was published alongside a blog by Colin Payne, FCA Head of Innovation Services, exploring how the FCA is considering how to enhance trust and clarify its rules further to the feedback received from the Sprint. The FCA has taken concrete steps, including: (i) expanding the AI Lab and Supercharged Sandbox to accelerate innovation; (ii) working with the Synthetic Data Expert Group to enable safe testing of new ideas; and (iii) holding a roundtable with the Information Commissioner's Office (ICO) on 9 May to discuss with industry leaders the challenges and opportunities they face in respect of AI adoption and wider innovation.

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