AI innovation in financial services – the latest insights straight from the horse’s mouth

In a speech delivered yesterday, the FCA gave some right-up-to-the-moment insight into the uptake that it is seeing for the Regulatory Sandbox, Supercharged Sandbox and Live Testing facilities that it has established to boost the deployment of safe and responsible AI in financial services. 

In a previous post, I summarised the support that the FCA offers to firms of all shapes and sizes that want to test AI ideas. To update from this very latest speech:

• The Regulatory Sandbox remains open and in the words of the FCA “we are always open, always ready to help”;
• The Supercharged Sandbox, where the FCA are collaborating with Nvidia, is currently open for applications and will remain open until 11 August. It sounds like the response to this opportunity for firms developing proof of concepts to benefit from supercharged computing capability, enhanced data sets and advanced tools, has been positive with firms “coming to us with ideas on topics like financial inclusion, financial wellbeing, and financial crime and fraud”;  and
• AI Live Testing where firms with a proof of concept will be able to benefit from “regulatory comfort and market deployment testing” applications go live next week with work intended to begin in September. 

There has been a good response to the regulator's engagement paper on Al Live Testing with “strong support for the initiative” and firms expressing a clear wish for collaboration with the regulator in this space. The regulator, of course, benefits from its own experience of technology adoption. It is testing AI with a view to improving its own processes, it has rolled out direct-to-customer AI, and it is using AI to help with "real-time knowledge". The shared experiences available to the industry present unique opportunities for collaboration - for firms to learn from the regulator, for the regulator to learn from firms, and for firms to learn from one another “sharing best practice and sector-specific insights”. 

The FCA has again confirmed that there will be no new rules and it very obviously views this as a good thing “Avoiding new regulation allows us to remain nimble and responsive as technology and markets change….how could we possibly write rules that keep up with the speed that AI is changing?”. 

Harnessing the benefits of technology and innovation has the potential to deliver results against all four pillars of the FCA's 5-year strategy by:

• enabling better consumer outcomes;
• fighting financial crime;
• making the regulator smarter, more efficient, and more effective; and
• supporting growth.

If you would like to discuss how current or future regulations impact what you do with AI, please contact me, Tom Whittaker, or Martin Cook. You can meet our financial services experts here and our technology experts here.

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Industry and innovators, entrepreneurs and explorers want a practical, pro-growth and proportionate regulatory environment....come and talk to us....we are tech positive and open for business. We want to hear your ideas, your successes, even your failures. Because we will only help the responsible adoption of AI if we share inspiration and ideas. We want the UK to be a global hub for AI adoption and by working together we can achieve that.

https://www.fca.org.uk/news/speeches/harnessing-ai-and-technology