Industry experts welcome the opportunity provided by the new regulatory initiative, but warn UK digital infrastructure must keep pace.
The UK payments industry has cautiously welcomed the Financial Conduct Authority’s new Supercharged Sandbox, which aims to accelerate the adoption of AI across the UK financial sector.
Suman Rao, Managing Director for the UK and Ireland at Avaloq, described the sandbox as potentially “transformative” for the wealth management industry, especially for firms which have been held back by limited access to data and expertise.
Launched in partnership with NVIDIA on June 9, the initiative offers firms access to advanced tools and computing power, resources smaller financial companies may lack.The UK financial watchdog stated it hopes to unlock new opportunities for innovation by providing a safe, regulator-supported testing environment.
“With our recent research highlighting that 87% of wealth managers across the UK believe AI will be integral to their future work and the UK wealth management as a whole, this initiative will no doubt be a welcome development for the industry,” said Rao.
“With the Sandbox promoting AI development in a safe and regulated environment, it will also go some way in providing reassurance to clients, many of whom are currently reluctant to trust AI when it comes to making investment decisions (24%) and financial planning (27%).”
However, she also noted trust will remain a key factor in adoption.
“Clients value human touch, and it’s unlikely that they will ever feel comfortable delegating decisions completely to AI. … Those who can [balance both] most effectively will be best positioned to lead as the industry enters a more innovative and automated future,” said Rao.
Infrastructure… It’s a problem
While the FCA’s initiative has generated optimism, there are concerns the UK lacks the underlying infrastructure to support meaningful AI progress.
“Without sufficient investment, the UK’s digital infrastructure gap will be a bottleneck for AI advancement,” warned David Sewell, Chief Technology Officer at Synechron. “Robust infrastructure acts as the foundation that enables innovation developments, attracts global tech talent, and positions companies to compete internationally.”
Sewell’s comments follow amid growing acknowledgement of this issue at the highest level of government. During London Tech Week on June 10, Prime Minister Keir Starmer announced a £1bn investment aimed at scaling the UK’s computing power. The pledge is part of the government’s long-term strategy to make Britain a global leader in AI.
“This is not just about creating infrastructure,” Starmer said at the event. “It’s about creating confidence,confidence that the UK is a place where innovation can thrive, where start-ups can scale, and where the state is an active and reliable partner.”
The funds are expected to support the development of AI growth zones with faster planning approvals and guaranteed access to clean energy for data centres.
“AI is developing rapidly. While Starmer’s £1bn commitment is encouraging, it matters what’s beneath the headline pledge,” Sewell said.
“As this technology grows it needs advanced data centres, power grids, and high-speed connectivity to flourish. For the UK to remain competitive in the global AI race, digital infrastructure must be treated as a priority by government, businesses, and investors.”
Payments sector finds promise in AI
In the payments space, AI is already showing real-world impact. Starling Bank this week integrated a generative AI chatbot, called Spending Intelligence, directly within its digital banking app.
The tool, powered by Google’s Gemini Large Language Model (LLM), lets users query their spending patterns through prompts, helping both personal and business customers make better-informed financial decisions.
This is just one example of how AI is being used to improve user experience and automate tasks. However, it also plays a critical role in fraud prevention, arguably the most urgent use case in UK payments. With fraud levels still high, many firms are banking on AI to improve real-time detection.
At this year’s Money20/20 conference, payments leaders described AI as having transformative potential, with some experts predicting a future shaped by “robot-to-robot” transactions, where AI agents manage and execute financial interactions without human intervention.
Starmer’s light-touch regulatory stance is helping to drive innovation and growth across the sector. However, this latest announcement indicates the UK still lacks the core infrastructure needed to fully unlock AI’s potential.
