The UK Financial Conduct Authority (FCA) and the Information Commissioner's Office (ICO) have published a discussion of how they are collaborating to support responsible innovation, providing regulatory clarity to give firms the confidence to ensure compliance with data protection and financial regulation.
A survey revealed that 33% of firms view data protection and 20% view FCA regulations as a constraint on AI adoption. A roundtable was held on 9 May to explore and understand these challenges. The FCA and ICO report that what came through was very little about specific regulations standing in the way of innovation. Rather, firms understand the broad rules, but many – especially smaller ones – want clearer examples of 'what good looks like' in practice and more opportunities for engagement to build confidence in trying new technologies.
Actions proposed in response include: (i) development of a statutory code of practice for the development or deployment of AI and automated decision making. They will also help firms to develop, test, and evaluate AI as part of the FCA's AI Lab; (ii) a roundtable with smaller firms later this year to better understand the challenges they face in adopting AI; (iii) working together with other regulators in the Digital Regulation Cooperation Forum (DRCF) to explain expectations around who holds responsibility when AI tools are developed by third parties; and (iv) increasing visibility of existing tools and services. The new DRCF workplan commits regulators to coordinate their approach with exploring how their respective regulatory frameworks apply to AI, including agentic AI, and to identify and address any areas of conflict.
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