Barclays and Lloyds picked for City watchdog’s AI live testing
Barclays has joined the second cohort of firms selected by the UK’s financial watchdog to get a safe run at testing AI as banking giants battle to bulk up their tech capacity.
The FTSE 100 constituent will join its peer Lloyds Banking Group – which will be represented by its subsidiary Scottish Widows – as well as the likes of Experian, Gocardless and UBS in the new group.
The trial aims to give firms a safe space for financial firms to test the use of AI in a controlled environment, without tripping over regulatory wires.
Partnered with Advai, a UK-based AI company specialising in automated testing, evaluation and assurance of AI systems, the scheme lets sucessful applications get a taste to tidy up governance issues before making high-stakes decisions.
“The initiative reflects our commitment to supporting the pace of change in AI, whilst demonstrating how regulators and industry can work together to harness innovation responsibly,” Jessica Rusu, chief data, information and intelligence officer at the Financial Conduct Authority (FCA) said during a speech at Innovate Finance’s Global Fintech Summit.
The latest announcement comes as banks race to beef up their in-house tech amid an AI arms race across the industry, including both the incumbents and new challenges.
Banks weigh up AI powers and threats
Banks have come under pressure with investors to sell their AI narratives as they compete with the tech-native neobanks.
But concerns have also risen over the capacity of AI’s ability to threaten cyber security. US regulators summoned top Wall Street bosses to an urgent meeting over fears that Anthropic’s new ‘Mythos’ tool could pose a threat to the financial system.
UBS analysts said earlier this year that banks would be “pressed hard” to share a “coherent financial story for AI implementation: what is being spent now and what it means for the future shape of expenses overall and headcount in particular.”
Each of Natwest, Lloyds and HSBC occupy a spot on the top 20 Evident AI index, which serves as a global benchmark for AI integration in the banking sector.
Partnerships have also dominated the sphere with Barclays partnering with Microsoft AI in a tie-up set to deploy AI tools to 100,000 bankers, Natwest sealing an agreement with OpenAI and HSBC partnering with French tech powerhouse Mistral.
Monzo, Natwest and Santander were among the first group to take part in the Financial Conduct Authority’s first AI testing initiative last December.