The FCA’s Regulatory Sandbox, launched in 2016, provides a controlled environment for firms to test financial innovations with real customers. Its success has led to adoption in jurisdictions across Africa, East Asia and the Pacific. Initially operating in cohorts, it shifted to an ‘always-open’ model in 2021 following the Kalifa Review, allowing firms to apply at the right stage in their development. This approach supports AI, DLT, crypto/DeFi, open banking and digital identity solutions, reinforcing the FCA’s role in driving financial innovation while ensuring market integrity. These initiatives also sit alongside the FCA’s broader focus on Consumer Duty, operational resilience and the responsible governance of AI systems to ensure that innovation delivers good outcomes for consumers.

To date, the sandbox has supported almost 200 companies. These firms operate across retail lending, investments, banking, payments and wholesale markets, leveraging AI, blockchain, APIs and predictive analytics to enhance financial services. The FCA notes that “almost 6 in 10 small and medium enterprise participants from the previous two pilots have made positive progress, including receiving funding and partnerships, launching products, or receiving industry awards and recognitions.”

The FCA’s Regulatory Sandbox continues in 2025 to play a central role in enabling innovation within the UK’s financial services sector, providing a controlled environment for firms to test new products with real consumers under regulatory oversight. The Sandbox has now received over 630 applications since moving to an “always-open” model, with 31 firms accepted into recent cohorts—demonstrating both strong market demand and the FCA’s selective, risk-based approach.

A key development this year is the launch of the “Supercharged Sandbox”, created in partnership with Nvidia to support advanced AI experimentation. This enhanced facility provides firms with access to high-performance compute and rich datasets, with cohort participation beginning from October 2025. The initiative signals a step-change in the regulator’s ambition to align financial-services innovation with frontier technologies while maintaining high standards of consumer protection.

The Digital Sandbox, made permanent in August 2023, supports early-stage and scaling firms with high-quality datasets, collaboration tools and a controlled testing environment. Nearly 60% of participants have secured funding, partnerships or industry recognition. The Sandbox builds on two pilot programmes in which participating firms accelerated product development and strengthened AI models while expanding industry networks.

The sandboxes form part of the FCA’s wider innovation ecosystem, which includes Innovation Pathways, TechSprints and broader Innovation Hub support. Together these provide structured, sequenced support that helps firms move from early-stage development through to live market testing.

The FCA continues to chair the Global Financial Innovation Network (GFIN), a coalition of over 90 international regulators and organisations. GFIN’s priorities, set out in its Annual Work Plan 2025, include emerging technologies, RegTech and SupTech, and expanding cross-border testing environments that allow firms to engage with multiple regulators simultaneously. Members include the Australian Securities and Investments Commission, the USA’s Consumer Financial Protection Bureau and the Hong Kong Securities and Futures Commission. GFIN’s cross-border testing model, inspired by the FCA’s Regulatory Sandbox, continues to influence regulatory practice globally and supports firms seeking international scale.

Collectively, these initiatives reinforce the UK’s position as a global leader in responsible, innovation-friendly regulation and provide a strong foundation for high-growth firms aiming to commercialise new technologies and enter global markets.

FCA Regulatory Sandbox website