Out-Law News 1 min. read
24 Nov 2015, 3:10 pm
The regulator said (12-page / 1.39MB PDF) it wants to "support the adoption of regtech" (regulatory technology) and has opened a call for inputs in an effort to give businesses a say in how the FCA can help them use the "new technologies to facilitate the delivery of regulatory requirements".
The FCA said that it has already seen regulatory technology developments emerge, from the rise of technology accelerators, to the take up of cloud-based solutions by financial technology companies and the increasing use of big data to "streamline and reduce the costs of providing data to regulators". The use of "real-time and system embedded compliance/risk evaluation tools" is also helping companies comply with rules such as those on anti-money laundering, it said. Further regulatory technology innovations include the growth of robo-advice in the retail investment market, it said.
The FCA, though, has asked businesses for their input to help it "refine [its] understanding and future approach" to regulatory technology.
Companies have been asked to point out "specific regulatory rules or policies that cause barriers to innovation or adoption of regtech for financial services", including at EU or global level. They have also been invited to state which rules or policies could be introduced to "facilitate innovation and adoption in regtech for financial services".
The FCA has also asked stakeholders to identify the role they would like the regulator to play to support the "development and adoption of regtech". Other questions have been framed to gauge what compliance-aiding technology businesses think could be introduced to make it easier to interact with regulators as well as what "existing regulatory compliance or regulatory reporting requirements" they feel would benefit most from such technology.
The regulator said the aim of its regulatory technology initiative is to deliver a regulatory environment "which allows innovation and competition within the fintech sector to flourish; which is flexible, efficient and effective; where new and emerging risks can be identified and managed effectively, and; where consumers have the appropriate level of protection and suitable access to the benefits of fintech".
The FCA's existing Project Innovate scheme already promotes the use of new technology and business models in the financial services sector. As part of the initiative the FCA runs an Innovation Hub to help companies looking to use technology to disrupt the UK's financial services sector address regulatory compliance issues.
Earlier this month the FCA announced plans to expand on its Project Innovate initiatives by setting up a new "regulatory sandbox" to help companies test "innovative products, services, business models and delivery mechanisms" in an environment in which regulatory exemptions apply.
In June the regulator also gave financial services companies the chance to identify the regulatory barriers to developing new digital and mobile services.