FCA Selects Barclays, UBS, and Six Others for Second AI Live Testing Cohort

The UK Financial Conduct Authority (FCA) has selected eight firms for the second cohort of its AI Live Testing initiative, aimed at evaluating the safe and responsible deployment of artificial intelligence in financial markets. Announced by Jessica Rusu, the FCA’s chief data, information and intelligence officer during UK FinTech Week, the group comprises a mix of major financial institutions, data firms, and fintech companies. The eight participants are Barclays, UBS, Experian, Lloyds Banking Group (Scottish Widows), Go-Cardless, Coadjute, Aereve, and Palindrome. The FCA is collaborating with London-based automated AI assurance specialist Advai to deliver the testing environment. The initiative assists firms in exploring critical challenges related to risk management, live monitoring, and consumer protection during live AI deployments. The cohort will test diverse customer-facing and business-to-business use cases. These include AI-enabled targeted support for investments, credit score insights for consumers, agentic payments, anti-money laundering (AML) detection, and Know Your Customer (KYC) verification. The technologies being evaluated span agentic AI, small language models, and emerging architectures such as neurosymbolic AI. Testing for the second cohort begins in April 2026 following an application window that opened in January, with activities running through the end of the year. The FCA plans to publish an evaluation report on the outcomes in the first quarter of 2027. Additionally, the regulator intends to issue a report highlighting good and poor industry practices regarding AI adoption later in 2026. The launch coincided with the release of the FCA's Innovation Insights report, which revealed that applications to the regulator's Regulatory Sandbox and Innovation Pathways surged by 49% compared to the previous year. The FCA noted that fintech market activity closely aligns with demand for its innovation services, particularly in fast-evolving sectors like AI. The regulator reaffirmed its intention to supervise AI under existing regulatory frameworks rather than introducing separate, additive regulations, supporting digital innovation while maintaining market integrity and consumer safeguards.