Laura WilesThe FCA has outlined how it is working with the ICO to help firms use AI responsibly, while protecting consumers and encouraging innovation.
The FCA and ICO see regulation as “a bridge, not a barrier”, and say if done right, regulatory controls should not be a brake on innovation, but rather a connection between creativity and public trust. The FCA outlined that it often collaborates with the ICO in order to make it easier for firms to navigation financial and data protection regulations:
- In 2023, the FCA and ICO clarified that data protection rules do not prevent banks from informing customers about better savings deals – since then, firms have significantly increased their communications, with over 100m messages relating to savings sent to customers.
- The regulators also engaged with firms to dispel myths about data sharing barriers between organisations and sectors in order to prevent, detect and investigate scams and fraud.
The FCA and ICO hosted a roundtable on 9 May 2025 on the challenges faced by firms deploying AI. It emerged that firms were not concerned about specific regulations preventing innovation – they understood the broad rules, but wanted clearer examples of good practice and more opportunities for engagement in order to build confidence in new technologies.
ICO has already published extensive guidance on AI, and the FCA notes that it is helping firms to develop AI tools as part of its AI Lab. In future, they will also be developing a statutory code of practice for firms developing or deploying AI and automated decision-making. The FCA also plans to host a further roundtable with smaller firms later this year.
The regulators were keen to raise awareness of the tools and services already available, including the FCA’s Digital Sandbox, Supercharged Sandbox and AI Live Testing, and ICO’s Innovation Advice Service, Regulatory Sandbox and Innovation Hub.