Seonaid Mackenzie of Sturgeon Ventures has long championed the FCA’s Digital Sandbox as an invaluable route for financial services firms navigating the regulatory landscape of innovation. Frequently, when tech-driven firms approach her Regulatory Incubator to become Appointed Representative (AR) Firms, she often suggests a different route: bypass the AR model and instead engage directly with the Digital Sandbox, making the FCA a test partner from day one.
Her enthusiasm for this approach has only grown with the FCA’s latest initiative — the launch of a ‘supercharged sandbox’ designed to foster artificial intelligence (AI) innovation. Announced as part of a strategic collaboration with tech leader Nvidia, the new sandbox significantly enhances the FCA’s innovation offering.
This initiative creates a powerful environment where firms can test early-stage AI models, including prototypes and proofs of concept, in a controlled yet live setting. Technologies such as machine learning, natural language processing, and predictive analytics can be explored with direct support from both the FCA and Nvidia.
A Strategic Pathway for AI-Driven Financial Innovation
The programme is open to firms across the financial spectrum — from wholesale markets to retail financial services — and is focused on addressing real-world challenges through responsible AI experimentation.
Applications are now open, with live testing scheduled to begin in October 2025.
Seonaid shared her excitement about the new opportunity:
“While the regulator is not going so far as to provide any regulatory exemptions, the sandboxing approach is pragmatic and will enable firms to test use cases that may need to be implemented on a very short timescale over the coming 24 months. It’s always best to have the regulator as a test client before going into the real world.”
A Broader AI Strategy by the FCA
This initiative sits within the FCA’s broader ‘AI Lab’ programme, a framework designed to support the safe and effective adoption of AI across UK financial markets. In addition to the supercharged sandbox, the FCA is also launching ‘AI Live Testing’, a regulatory-first model that allows firms to work closely with FCA supervisors during real-world AI deployment.
Other components of the AI Lab include:
- AI Spotlight – A digital showcase highlighting AI solutions and developments
- AI Sprint – A two-day in-person event bringing together industry, academia, and consumer groups to explore real-world applications and challenges of AI
Seonaid believes these enhancements are particularly valuable as RegTech and compliance tools increasingly embed AI, supporting the operational needs of both emerging startups and established institutions.
To learn more about how to participate, read the FCA’s Supercharged Sandbox Participation Pack here:
https://fcainnovation.co.uk/wp-content/uploads/2025/06/supercharged-sandbox-participation-pack.pdf
