UK FCA publishes feedback statement on AI live testing service

The UK Financial Conduct Authority (FCA) has published feedback statement FS25/5, summarising responses to its April engagement paper on AI live testing. The AI live testing service aims to promote the safe and responsible adoption of AI in UK financial services through a collaborative, real-world testing environment. The live testing service is voluntary and open to firms that have developed AI proofs of concept and are active in UK financial markets, subject to competitive selection criteria. The FCA has made it clear that the feedback statement does not set out its policy position or views on AI use in financial markets. The feedback reveals strong industry support for the proposal, with respondents recognising the potential of AI live testing.

Key benefits highlighted include improved model explainability, early risk identification and facilitating trust and collaboration in AI, among others. However, some concerns were raised around data quality, third-party model transparency and the operational complexity of deploying AI systems. Respondents also suggested areas where the FCA could further support firms in adopting AI safely and responsibly, including on model evaluation and validation, scenario testing, fairness and bias mitigation and broader collaboration. The FCA confirms that it will proceed with the launch of AI Live Testing as part of its AI Lab, with the first cohort commencing in October. The application window for this first cohort closes on 15 September. The FCA will begin working with participating firms from October, with the application window for a second cohort opening later in the year. An evaluation report will be published following the 12-month testing period.

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