WMG secures funding for responsible AI research in financial services
Editorial Team
Posted On December 1, 2025
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Experts at Warwick Manufacturing Group (WMG) at the University of Warwick have launched a new project examining the safe and responsible use of generative AI in financial services after securing UKFin+ funding from the Engineering and Physical Sciences Research Council.
The 12-month collaborative research project is led by Dr Anita Khadka and Professor Carsten Maple at WMG. It comes amid concerns around AI-generated misinformation, hallucinated advice and regulatory uncertainty in high-risk financial settings, including the potential impact on consumers and markets.
Working with researchers from Keele University and Coventry University, the Responsible AI Systems for Ethical Finance project will assess how large language models, including GPT-4, perform in real-world financial applications such as investment advice, credit scoring and customer-facing automation. The project will also examine how hallucination risks can be identified, managed and governed.
Dr Anita Khadka, Assistant Professor in Trustworthy and Responsible AI at WMG and Principal Investigator for RAISE-Fin, said: “As generative AI becomes increasingly embedded in financial services, ensuring the reliability, auditability, and regulatory alignment of these systems is critical. This project brings together technical, legal, and business expertise to address these urgent challenges.”
The research is structured around three work packages. WMG will develop an AI evaluation and hallucination detection framework using realistic prompts drawn from high-risk financial use cases. Coventry University will carry out a comparative legal and regulatory analysis of AI governance across the UK, EU and US, producing a policy response toolkit. Keele University will focus on business process compliance, helping financial institutions map hallucination risks within core workflows.
The project aims to deliver guidance, best practice and auditing tools for financial institutions and regulators to support the safe and ethical use of AI in financial services.
Professor Carsten Maple, Professor of Cyber Systems Engineering at WMG, said: “This project is part of our programme of work in trustworthy AI being undertaken by the Secure Cyber Systems Research Group here at WMG. Our aim is to deliver world-class research with direct pathways to impact, that allows the confident and responsible design and deployment of AI.”
Dr Dimitrios Kafteranis, Associate Professor at Coventry University’s Research Centre for Resilient Business and Society, said: “While technology evolves quickly, the law usually fails to keep pace. While we welcome AI and new technologies, we must ensure that they adhere to legal standards, human rights, and ethical principles.”
Dr Geetika Jain, Assistant Professor in Digital Transformation at Keele University, said: “The project provides a crucial framework for navigating the immense opportunities and risks of advanced AI in the FinTech sector. It moves beyond theoretical discussion to offer actionable policy pathways and risk mitigation strategies.
“The project outputs will directly inform both regulators and financial institutions, helping to shape a safer and more trustworthy financial services ecosystem grounded in responsible AI deployment.”
The project is supported by FinTech West, which will bring together financial institutions, regulators and technology providers to support engagement and knowledge sharing.
The 12-month collaborative research project is led by Dr Anita Khadka and Professor Carsten Maple at WMG. It comes amid concerns around AI-generated misinformation, hallucinated advice and regulatory uncertainty in high-risk financial settings, including the potential impact on consumers and markets.
Working with researchers from Keele University and Coventry University, the Responsible AI Systems for Ethical Finance project will assess how large language models, including GPT-4, perform in real-world financial applications such as investment advice, credit scoring and customer-facing automation. The project will also examine how hallucination risks can be identified, managed and governed.
Dr Anita Khadka, Assistant Professor in Trustworthy and Responsible AI at WMG and Principal Investigator for RAISE-Fin, said: “As generative AI becomes increasingly embedded in financial services, ensuring the reliability, auditability, and regulatory alignment of these systems is critical. This project brings together technical, legal, and business expertise to address these urgent challenges.”
The research is structured around three work packages. WMG will develop an AI evaluation and hallucination detection framework using realistic prompts drawn from high-risk financial use cases. Coventry University will carry out a comparative legal and regulatory analysis of AI governance across the UK, EU and US, producing a policy response toolkit. Keele University will focus on business process compliance, helping financial institutions map hallucination risks within core workflows.
The project aims to deliver guidance, best practice and auditing tools for financial institutions and regulators to support the safe and ethical use of AI in financial services.
Professor Carsten Maple, Professor of Cyber Systems Engineering at WMG, said: “This project is part of our programme of work in trustworthy AI being undertaken by the Secure Cyber Systems Research Group here at WMG. Our aim is to deliver world-class research with direct pathways to impact, that allows the confident and responsible design and deployment of AI.”
Dr Dimitrios Kafteranis, Associate Professor at Coventry University’s Research Centre for Resilient Business and Society, said: “While technology evolves quickly, the law usually fails to keep pace. While we welcome AI and new technologies, we must ensure that they adhere to legal standards, human rights, and ethical principles.”
Dr Geetika Jain, Assistant Professor in Digital Transformation at Keele University, said: “The project provides a crucial framework for navigating the immense opportunities and risks of advanced AI in the FinTech sector. It moves beyond theoretical discussion to offer actionable policy pathways and risk mitigation strategies.
“The project outputs will directly inform both regulators and financial institutions, helping to shape a safer and more trustworthy financial services ecosystem grounded in responsible AI deployment.”
The project is supported by FinTech West, which will bring together financial institutions, regulators and technology providers to support engagement and knowledge sharing.
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