Andrew Bailey, Chief Executive of the UK Financial Conduct Authority (FCA), addressed the regulator’s business plan for the coming year in a speech this week. Touching upon innovations in financial services, Bailey stated;
“Fintech and Big Data are transforming financial services. We will seek to maintain a regulatory environment where consumers and firms can maximise the opportunities of competition, innovation and Big Data while ensuring consumers don’t suffer harm as a consequence of those innovations. Particularly exciting over the coming months will be our work with fellow regulators on a blueprint of the global sandbox – in which innovative firms can test in multiple jurisdiction, minimising time to market.”
While is unclear which jurisdictions may participate in this global sandbox at this time, any effort to streamline the operation of financial firms (Fintech or otherwise) in a cross border fashion, is an admirable goal.
The FCA Business Plan was published last month. Included in the document was the statement;
“Technology has the potential to increase competitiveness, support innovation and efficiency, transform firms’ activities and shape consumer and counter-party access to products and services … Fintech firms are challenging traditional financial business models and are likely to play a key role in firms moving towards less capital-intensive business models, where (after the initial investment) firms benefit from economies of scale with lower ongoing costs.”
While addressing the benefits of Fintech, Bailey has consistently been quick to balance out these statements with concern for investor protection. The UK has emerged as a leading global hub for Fintech innovation but as additional verticals and emerging opportunities, such as blockchain and initial coin offerings, enter the financial services sector, you can be certain the mission of fostering competition comes with additional challenges. Add GDPR, Brexit and more, and the FCA has its work cut out for them if they want to maintain their top Fintech status.