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 across Africa, East Asia, and the Pacific. Initially operating in cohorts, it moved 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, open banking, and digital identity solutions, reinforcing the FCA’s role in driving financial innovation while ensuring market integrity.

To date, 166 firms have tested in the first seven cohorts, with 29 more accepted under the new model. These firms operate across retail lending, investments, banking, payments, and wholesale markets, leveraging AI, blockchain, APIs, and predictive analytics to enhance financial services.

As of November 2024, the FCA has launched new initiatives to accelerate innovation. The Digital Securities Sandbox (DSS), introduced in September, enables firms to test DLT-based securities issuance, trading, and settlement within a modified regulatory framework. In October, the FCA updated its Regulatory Initiatives Grid, providing firms with a roadmap of regulatory changes over the next 24 months. In November, it confirmed the Pensions Dashboard Service framework, improving consumer access to pension information. These developments, alongside the Pisces trading platform, reinforce the UK’s leadership in financial services innovation.

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 programs where 40 firms reported faster product development—by an estimated 18-24 months—while refining AI models and expanding industry networks. 

​FCA continues to chair the Global Financial Innovation Network (GFIN), a coalition of over 90 international regulators dedicated to fostering financial innovation in the interest of consumers. Notable members include the Australian Securities and Investments Commission, the USA’s Consumer Financial Protection Bureau, and the Hong Kong Securities and Futures Commission. GFIN has established a cross-border testing environment for scale-ups, inspired by the FCA’s Regulatory Sandbox model. This model has been adopted by more than 95 regulators globally, reflecting the FCA’s leadership in promoting innovative financial ecosystems.

FCA Regulatory Sandbox website