The FCA has launched an AI Lab to help the firms it regulates build and implement artificial intelligence solutions.

The regulator’s AI Lab will provide AI-related insights, discussions, and case studies. It will also help the regulator and industry deepen its understanding of potential AI risks and opportunities in a collaborative environment, where it claims regulators and industry can ‘engage candidly and openly’.

Jessica Rusu, chief data, information and intelligence officer at the FCA, said the regulator has developed its new AI Lab in response to the accelerating pace of innovation in financial services.

She said: “AI will revolutionise financial services, providing solutions to improve consumer financial inclusion, help prevent market abuse, and support the delivery of new products and services. And whilst we are just starting to see AI’s benefits emerge, we are clear that those benefits do not come without risks.

“As a regulator, we 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. Even some of the world’s most profusive backers of AI recognise the importance of ensuring the risks of AI are mitigated, as we all work to realise the undoubtedly enormous benefits the technology has to offer.”

The Lab will be made up of four components.

The AI Spotlight will provide a space for firms to share examples of how they are using AI, and share emerging AI solutions. It will be hosted on the Innovation Services FCA portal.

AI Policy Sprint will bring together industry leaders, academics, regulators, technology firms and consumers to focus on how safe adoption of AI financial services could work. It will be an annual event, the first of which will be hosted by the regulator in January.

The AI Input Zone will invite stakeholders to share their views on the future of AI in financial services, including regulatory approach, through an online feedback platform which will open in November.

The FCA will also run AI-focused TechSprints and enhance its Digital Sandbox infrastructure through greater computing power, enriched datasets and increased AI testing capabilities.

Ms Rusu said the AI Lab will help inform the approach the regulator takes to the use of AI by the firms it regulates.

She said: “It’s a chance for us to work together to shape the future of AI in financial services, providing us with a practical understanding of AI usage, and helping to inform the FCA’s policy approach.

“These initiatives are built with your needs in mind, and we are eager to continue collaborating to ensure that the next wave of innovation is more impactful than the last.”