A director of the Financial Conduct Authority (FCA) has said that he expects regional fintech ‘hubs’ to form in Leeds and Manchester, and in Glasgow and Edinburgh, and promised that his organisation would do all it could to encourage the growth of these hubs.
Addressing the Leeds Digital Festival, Christopher Woolard, Executive Director of Strategy and Competition at the FCA, began by addressing the issue of why it is in the regulator’s interest for firms to embrace innovative ways of doing business. Mr Woolard observed that the FCA had a legal duty to promote competition within financial services, and that technology had a vital role to play in encouraging competition.
Mr Woolard said that since the launch of ‘Project Innovate’ in 2014, the FCA had assisted 358 firms. Project Innovate is designed to help firms tackle regulatory barriers to innovation.
The FCA’s Regulatory Sandbox has seen the FCA accept 31 applications from firms who were seeking “to test innovative products, services, business models and delivery mechanisms in a live environment.”
Mr Woolard went on to describe some of the areas the FCA will be addressing in the coming months. These include:
• Expanding its Advice Unit, which currently provides help to firms who are looking to implement automated advice models for investments, protection and pensions. In the coming months, the Unit will also be able to support firms offering mortgage, general insurance and debt advice; and firms that provide guidance instead of advice
• Expanding its international fintech focus – Mr Woolard referred to the fintech co-operation agreements the FCA has already signed with regulators in China, Japan, Canada and Hong Kong
Next, the FCA director commented that many of the recent fintech advances have occurred in London. However, he said that this was changing, as he observed that:
“In our first sandbox cohort, around two-thirds of our firms were from London or London-based with very few from other parts of the UK. This time the proportion of firms in London is down to just over half with more regional representation.”
Identifying the North of England and Scotland as areas with great potential to become fintech hubs, the FCA director said:
“We will work with the local authorities, development partners and firms in those locations, as well as the Scottish Government and the Treasury’s digital envoys.”
In closing, Mr Woolard re-iterated the importance of fintech to the FCA, by saying:
“We want to get to a stage where regardless of where a good idea is conceived, it has an equal chance of coming to fruition. This is not about picking winners – there will be good ideas and bad ideas from every part of the UK – but ensuring as level a playing field as possible across the country.
“The great thing about innovation is that it doesn’t discriminate – brilliant ideas can come from anyone, anywhere, at any time. And we want to ensure that we can best support that innovation wherever that happens to be.
“So talk to us. As we have done throughout our innovation work, we expect to experiment and evolve along the way as we learn. We will do what works.”
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