FCA exec endorses cash rewards for fintech innovation

Out-Law News | 01 Dec 2022 | 4:36 pm | 2 min. read

Singapore’s approach of providing cash prizes to businesses that develop innovative technological solutions in financial services has been endorsed by the chief operating officer (COO) of the UK Financial Conduct Authority (FCA).

Speaking at a CityUK event in Edinburgh, Emily Sheppard praised the Monetary Authority of Singapore (MAS) for hosting the seventh Singapore fintech festival earlier this month. At the event, which attracted more than 62,000 participants from over 115 countries, MAS awarded prizes of up to S$150,000 (£90,675) to dozens of firms that MAS said had developed solutions to “accelerate the pace of digitalisation, innovation and sustainability in the financial industry

“That’s a regulator investing. I would love to be able to do that. We don’t have that model here, but sometimes thinking outside the box can create better results,” Sheppard said. Her comments came days after the UK and Singapore renewed their joint commitment to a financial partnership agreed in 2021, which focuses on sustainable finance, fintech and innovation. Senior officials from the FCA, MAS, and the UK Treasury also agreed on a memorandum of understanding on the UK-Singapore fintech bridge – designed to support investment and innovation in the sector across both countries.

Sheppard, who retained her role as the FCA’s executive director of authorisations when she was appointed as its COO in January, told attendees that the authority was already helping to foster “a climate of innovation” in the UK. “As a regulator, we created the world’s first sandbox for regulation, and we continue to invest in that. We’ve made that path from the sandbox to authorisation easier,” she added.

Sheppard reiterated the FCA’s commitment to promoting UK financial services outside of London, citing the recent decision to double the number of FCA officials based in Edinburgh to 400, as well as its newly opened office in Leeds. The regulator also has representation in Wales and Northern Ireland.

She said the FCA’s regional presence was also important to attracting talent to the regulator. “One of the reasons why we chose Leeds was because of the propensity of universities around there that produce data scientists,” Sheppard said. She added that the University of Edinburgh’s reputation as a centre for excellence in artificial intelligence also meant it was another location where the FCA hopes to recruit experts “who really understand fintech and understand crypto”.

Sheppard praised the FCA’s use of ‘tech sprints’, events intended to help the regulator develop technology-based solutions to address specific challenges in the financial services industry. “We’re now starting to introduce ‘policy sprints’, where we sit down and think about a new way of regulating. We are changing the way we regulate by looking at data – all the data, the regulatory returns you have to send to us – we are looking at them all, seeing how we are using them,” Sheppard said.

She added that the FCA might decide to “strip back” the information it requires firms to provide if it found that it did not need it, but added that policy sprints might also uncover instances where the FCA required different information from firms. “We are looking at that information in real time to see where we need to change, and where problems may be occurring,” Sheppard said.

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