FCA Introduces PASS and AI Testing to Support Financial Innovation

The Financial Conduct Authority (FCA) has introduced simple new rules to encourage fresh ideas in financial services. These changes aim to keep the UK a top player in the world of finance and bring in companies from other countries. Announced at the Innovate Finance Global Summit 2025, the rules will strengthen markets like commercial insurance, derivatives, debt issuance, and foreign exchange.

Jessica Rusu, a senior FCA leader handling data and intelligence, spoke about the UKs strong position in these areas. She shared plans to keep this lead, like tweaking how wholesale markets work and setting up a new way for people to invest in private markets.

PASS: Pre-Application Support for Crypto and Payments Firms

To help new companies join the UK market easily, the FCA started PASS. This support is for businesses in crypto, payments, and wholesale fields. PASS lets them talk to the FCA before officially applying, giving them tips to make the process smoother and faster.

AI Live Testing: A Groundbreaking Initiative

The FCA also kicked off AI Live Testing, a bold step to help companies try out AI tools safely. Run by the FCAs AI Lab, this program checks that AI used for customers follows the rules. It starts in September 2025 and will last 12 to 18 months, making sure AI is ready for the real world.

Expanding Sandboxes to Support Innovation

The FCA is growing its Regulatory Sandbox and Digital Sandbox programs too. These give companies a safe space to test new ideas, plus access to money and market info while they get approved. Studies say firms in these programs often get more funding and keep running longer.

Rusu wrapped up by saying, “Through these market changes, we know consumers and industry look to regulators as a guardian of stability. Having a clear plan for what we prioritize in turbulent times will help financial services, and particularly those who want to innovate and grow their business.” With these efforts, the FCA is making the UK a top spot for new financial ideas, ensuring tools like AI can grow safely under clear rules.