The Financial Conduct Authority (FCA), has been tasked with a mission to change and adapt to present day financial market realities. Charged with the very important role of investor protection, and market efficiency, the FCA also maintains a mission to encourage competition. It is this same competition mandate that has allowed new forms of finance to flourish in the UK. While there will most certainly be bumps along the way, many engaged in disruptive finance view the UK regime as clear leaders in facilitating FinTech innovation.
In regards to banking, leadership appears to understand that hobbling regulation is not the final solution for the missteps of the past. But allowing innovative and new approaches to rise, alongside prudent regulation, is a more beneficial strategy for all consumers.
Martin Wheatly, CEO of the FCA states;
“One of the most significant changes that I have been particularly proud of has been the increased activity of our Project Innovate initiative. Regulation can be portrayed as a barrier to the entrepreneurial spirit of individuals and start-ups with rules, checks and balances that prevent burgeoning ideas from flourishing. I don’t think it needs to be that way.”
“I believe that to ensure that financial markets remain vibrant and offer consumers the best outcome is through newcomers entering the market, challenging the established order and keeping costs low.”
The FCA believes that “breaking down those barriers that have prevented firms coming into sectors, like banking, is an essential part of our role”. As part of their review the FCA has set out to change two areas including the authorization process for new banks and a “major shift” in the approach towards regulations of banking startups.
The 143 page document is embedded below.
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