The FCA’s commitment to harnessing AI not only within its own operations but also in supporting financial firms to innovate responsibly was highlighted in the keynote address at yesterday’s City Week conference in London.

Jessica Rusu, Chief Data, Information and Intelligence Officer at the FCA, delivered the speech and highlighted the critical role of AI and technology in achieving the FCA’s strategic priorities for 2025. She stressed the FCA’s commitment to harnessing AI not only within its own operations but also in supporting financial firms to innovate responsibly.

Rusu opened by noting the rapid evolution of AI, contrasting it with the focus on “advanced analytics” a decade ago, and emphasized that “it is about data, it is about intelligence and it is about management.”

Growth, innovation, protection

The core of Rusu’s speech revolved around the interconnectedness of the FCA’s responsibilities: fostering economic growth, driving innovation, combating financial crime, and helping consumers. She stressed that AI is central to achieving these objectives. “Innovation will help firms attract new customers and serve their existing ones better through new products and services,” she stated.

Furthermore, a “smarter regulator means harnessing technology, using it in how we use regulation, but also supporting firms in harnessing technology.”

Rusu proudly asserted the UK’s leading position in financial services, citing its excellence in commercial insurance, debt issuance, and foreign exchange trading. She echoed recent sentiments from figures like Nvidia CEO Jensen Huang, who described London as being in the “Goldilocks Zone” for AI due to its balance of research, investment capital, and talent.

This favorable environment, combined with a progressive regulatory approach and a thriving fintech ecosystem, positions the UK as a prime location for attracting new businesses. The FCA’s new Director for Asia Pacific, Camille Blackburn, started July 1, further emphasizing the regulator’s proactive global outreach to attract business to the UK.

From the sandbox to the AI Lab

The FCA has a strong track record of fostering innovation, exemplified by Project Innovate, launched in 2014, which included the world’s first regulatory sandbox. Since its inception, the regulatory sandbox has seen hundreds of applications, with the FCA receiving over 630 applications for it since its launch. It has carefully selected those that genuinely bring innovative products and services to consumers.

Building on this success, the FCA is not “resting on its laurels.” Rusu announced that the Digital Sandbox has been “supercharged” to be “AI ready.” This includes providing innovators with access to synthetic data assets, which are often expensive for small businesses to acquire, encompassing everything from global trends to specific fraud typologies.

In a key development, the FCA, in partnership with Nvidia, is enabling innovators to leverage these enhanced resources to build AI proofs of concept. Applications for this supercharged sandbox are already “flooding through,” with diverse use cases emerging in areas such as financial inclusion, financial wellbeing, and financial crime.

The FCA itself is also heavily investing in AI. Rusu revealed that in a recent joint survey with the Bank of England, at least 75% of FS firms were already using a form of AI. Internally, the FCA is leveraging AI to process vast amounts of unstructured text documents for decision-making on applications and, significantly, in financial crime detection.

Rusu highlighted a “Minority Report-kind of way” capability, where their intelligence network analytics combined with LLMs can identify emerging harm two and a half years sooner than traditional methods, preventing substantial loss of economic value.

To further its understanding and responsible deployment of AI, the FCA launched its AI Lab in January 2025. This lab features different “zones” for testing and engagement, bringing together academics and industry experts to identify and address risks such as bias and deepfakes.

AI live testing

A particularly novel proposition introduced by Rusu was AI live testing. This initiative allows firms that have already developed AI solutions and are ready for market launch to work directly with the FCA in an agile, on-prem, and off-prem testing environment. This combines supervisory technology, data, enforcement, and authorizations, providing regulatory certainty without necessarily introducing new rules.

Applications for AI live testing are currently being accepted for the next couple of weeks, with the program set to kick off on September 30 and begin in earnest in October 2025. This demonstrates the FCA’s commitment to supporting firms in deploying AI responsibly and safely, addressing the demand for clear guidance on how to integrate AI effectively.

Rusu concluded by emphasizing the FCA’s deep understanding of technology, AI, and data science, reiterating her view that the UK is “the best place in the world to do business” and is “open for AI business.” She encouraged interested parties to contact the sandbox teams for further engagement.