FCA sets out plans for fintech
The Financial Conduct Authority has set out its plans to encourage competition and support innovation in fintech in its Business Plan for 2017/18. In addition to continuing… Read more
The Financial Conduct Authority has set out its plans to encourage competition and support innovation in fintech in its Business Plan for 2017/18.
In addition to continuing to support fintech through Project Innovate and the regulatory sandbox, the FCA is also planning several activities over the coming financial year.
Regtech innovation: The FCA is keen to promote new technologies that increase regulatory compliance and reduce costs. These regtech technologies include solutions that help firms with regulatory reporting, increase access to financial services, and improve real-time monitoring and surveillance.
Automated advice services: The FCA will continue to offer support, through its Advice Unit, to firms planning to offer robo-advice to the mass market. The FCA plans to publish guidance to help firms develop effective and compliant robo-advice services.
International ties and regional hubs: The FCA will continue to build relationships with fintech regulators in other states, as well as working more closely with regional fintech clusters.
New bank start-ups: The FCA will continue to support firms that are new to the banking sector, through its New Bank Start-Up Unit
The FCA recognises the positive potential of fintech in a number of areas, such as the use of distributed ledger technology to storing customer data for the purposes of anti-money laundering compliance and the use of application programming interfaces (APIs) to allow third parties to access customers’ bank account data in accordance with the Second Payment Services Directive (PSD2).
However the FCA also warns that, if not managed well, fintech can lead to additional risk in the financial system. In particular it has emphasised the need to ensure good governance of firms’ IT systems and proper implementation of change management projects, especially when dealing with legacy systems. Further, the FCA has announced a number of measures to address the increased threat of cyber-attacks and fraud.