Alongside their 2019 Business Plan, the UK Financial Conduct Authority (FCA) published their research agenda for 2019.
The FCA states that research plays a fundamental role in their mission of evidence-based policy and staying ahead of trends in financial services. The regulator says their research agenda is both ambitious and complex.
So what’s on the list? There are multiple Fintech related initiatives.
Distributed ledger technology (or blockchain) is a key topic. The FCA states:
“With DLT evolving so rapidly, research is required to identify the technology’s potential benefits and risks, which will help shape regulatory interventions. Benefits may include improved access to banking services, faster and cheaper payments and less systemic risk from reduced time to settling financial instruments. Potential risks could include the anonymity of transactions making them a vehicle for financial crime, and the implications of quantum computing for DLT security.”
Regtech may have profound implications for regulators around the world. Utilized effectively, Regtech has the potential to streamline the compliance process for both regulated firms and enforcers.
The FCA believes that there are enormous opportunities for regulators to operate more effectively and efficiently through new technologies. Current interests within the FCA include insights and methods for automation and more consistent application of what are now manual processes.
More and more, artificial intelligence (AI) is becoming routine in financial services. Yet usage of big data and its outcomes also incorporates significant risk. The FCA believes there is “need for further work” and investigation to reduce potential harm.
The FCA Research Agenda is embedded below.