FCA selects firms for second cohort to live test AI applications

The FCA has chosen eight firms to join its second cohort of finance firms live testing AI applications.

Speaking at UK FinTech Week, the FCA’s chief data, information and intelligence officer Jessica Rusu confirmed the group will comprise Aereve, Coadjute, Barclays, Experian, Go-Cardless, Lloyds Banking Group (Scottish Widows), UBS and Palindrome.

The FCA is working with London-based specialist in automated AI assurance Advai to provide the AI live testing and help applicants check risk management processes and see how live monitoring will work.

AI models will range from agentic AI and small language models to emerging solutions such as neurosymbolic AI.

Firms in the second cohort will test 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.

Rusu said: “We’re continuing to collaborate with firms to support the safe and responsible development of AI in UK financial markets.

“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.”

Testing will conclude by the end of the year, with an evaluation report published in Q1 2027. The FCA will also publish a Good and Poor Practice report for AI in financial services later this year.

Meanwhile the regulator has released its Innovation Insights Report, which shows global fintech investment exceeded $130bn in 2025 with the UK ranking second only to the US, with 445 deals and $15 billion in disclosed investment.