The Financial Conduct Authority (FCA) is introducing new regulatory measures to support innovation in financial services. The changes are part of an effort to attract international firms and maintain the country’s global position in key financial markets.

Jessica Rusu, Chief Data, Information and Intelligence Officer at the FCA, spoke about the new initiatives at the Innovate Finance Global Summit 2025. She said the UK continues to lead in areas such as commercial insurance, derivatives, debt issuance, commodities, and foreign exchange.

FCA Announces PASS and AI Live Testing

Rusu outlined several reforms aimed at supporting this leadership. These include changes to the wholesale market structure and the creation of a new platform to increase access to private market investments.

To assist firms considering entry into the UK market, the FCA has launched a pre-application support service. Known as PASS, it is designed for cryptoasset, payments, and wholesale firms. It allows companies to engage with the regulator before submitting formal applications.

In line with its support for responsible technology use, the FCA has also announced a new program called AI Live Testing. The initiative allows companies to test generative AI tools under the supervision of the regulator. The aim is to explore how such tools can be used in consumer-facing services without breaching regulatory standards.

The live testing service, part of the FCA’s AI Lab, aims to accelerate AI adoption by helping firms ensure their tools are market-ready. It will provide insights into AI’s impact on UK financial markets and run for 12 to 18 months, launching in September 2025.

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Sandboxes Expanded to Support Market Innovation

The FCA is also expanding its Regulatory Sandbox and Digital Sandbox programs. These offer firms support during the authorisation process and access to financial and market data. According to independent research, participants in these programs are more likely to receive investment and continue operations over time.

Rusu said, “Through these market changes, we know consumers and industry look to regulators as a guardian of stability. Having a clear plan for what we prioritise in turbulent times will help financial services, and particularly those who want to innovate and grow their business.”