On 17 October 2024, the Financial Conduct Authority (FCA) published a speech on “Ten years of FCA innovation: impact and opportunity” which was delivered by its chief data, information and intelligence officer, Jessica Rusu, at an FCA Innovation 10th anniversary event.
FCA innovation over the past 10 years
The speech notes that 10 years ago, the FCA became the first financial regulator in the world to launch a regulatory sandbox, and that since then it has supported almost 1,000 firms and over 95 other regulators have introduced a sandbox model.
Ms Rusu outlines the FCA’s innovation initiatives to date and gives examples of their successes, highlighting the key role played by the “strong partnership between industry and regulator”. She explains that as part of its 10th anniversary celebrations, the FCA has published a Lookback Report which includes detail on the depth and breadth of its services and the support it has provided to firms across the financial services landscape over the past decade.
Future of AI in financial services
The remainder of the speech considers future innovation in financial services, the most transformative of which is artificial intelligence (AI). Ms Rusu confirms that AI is a priority for the FCA, noting that as a regulator it must play a critical role in ensuring AI is deployed in a way that is safe, fair and in the best interests of consumers and the market as a whole.
Launch of the AI Lab
As part of the FCA’s ongoing commitment to innovation, the FCA is launching an AI Lab, which is the next step in its mission to help firms overcome challenges they face in building and implementing AI solutions, as well as supporting the Government’s work on safe and responsible AI development.
Ms Rusu explains that the FCA is also exploring closer collaboration with the Digital Regulation Cooperation Forum on this initiative, as a natural evolution in their work together after having collaborated on the AI & Digital Hub. The AI Lab is intended to play a critical role by providing AI-related insights, discussions, and case studies, helping the FCA to deepen its understanding of potential AI risks and opportunities in a collaborative environment, where regulators and industry can “engage candidly and openly”.
The AI Lab will be made up of 4 components:
- AI Spotlight, which will provide a space for firms and innovators to share real-world examples of how they are leveraging AI, and to share emerging AI solutions that will lead to industry growth. Projects accepted to the AI Spotlight will be featured on a dedicated Digital Spotlight webpage and will also take part in a Showcase Day at the FCA London office on 28 January 2025.
- AI Sprint, which aims to bring together the brightest minds in industry, academia, regulation, technology and consumer representatives, to focus on how to enable the safe adoption of AI in financial services. The inaugural AI Sprint will take place in January 2025.
- AI Input Zone, where the FCA will invite all stakeholders to have their say on the future of AI in UK financial services, including its regulatory approach, through an online feedback platform. The platform will open in November 2024.
- Supercharged Sandbox: Looking ahead, the FCA plans to run AI-focused TechSprints and enhance its Digital Sandbox infrastructure through greater computing power, enriched datasets and increased AI testing capabilities.