The Financial Conduct Authority has selected eight firms including Barclays, Experian, Lloyds Banking Group and UBS to join the second cohort of its AI Live Testing programme, with trials beginning in April 2026.

Announced at UK FinTech Week, the initiative will see participants test artificial intelligence applications under regulatory oversight, focusing on risk management and live monitoring. The regulator is working with London-based AI assurance specialist Advai to support firms in deploying systems safely across financial markets.

Jessica Rusu, chief data, information and intelligence officer at the FCA, said the programme reflects a collaborative approach between regulators and industry. “We’re continuing to collaborate with firms to support the safe and responsible development of AI in UK financial markets,” she said, adding that tailored support demonstrates how innovation can be advanced responsibly.

The second cohort includes Aereve, Coadjute, GoCardless and Palindrome alongside the larger institutions. Use cases span both consumer-facing and business applications, including targeted investment support, credit scoring insights, anti-money laundering detection and agentic payments, according to the FCA.

Separate reporting by Reuters highlights how Lloyds Banking Group is already piloting an AI-driven investment guidance tool through its Scottish Widows arm. The product, currently being tested with a limited group of users, is designed to offer guidance rather than regulated financial advice and is expected to be expanded later in 2026.

Chira Barua, chief executive of Scottish Widows, told Reuters the tool acts “like a satnav for investments”, helping customers navigate options without making decisions on their behalf. The distinction between guidance and advice is central to regulatory oversight, with advice subject to stricter requirements.

Reuters also reports that the FCA will use the testing programme to examine emerging concepts such as “targeted support”, a lighter-touch regulatory category aimed at addressing the UK’s advice gap. This approach is intended to broaden access to financial guidance for consumers who may not be able to afford personalised advice.

The regulator said applications to its broader innovation services, including the Regulatory Sandbox and Innovation Pathways, rose 49 per cent year on year. It plans to publish a report later in 2026 outlining good and poor practices in AI adoption, with a full evaluation of the testing cohort due in the first quarter of 2027.

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