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Ever since the FCA announced Project Innovate, I've been looking forward to seeing the opportunities that this would open up for financial services. For those of you who don’t know what this initiative is, here's a quick summary.
Project Innovate was developed by the FCA to foster competition and growth in financial services. Its role is to by support both small and large businesses developing products and services that could genuinely improve consumer experiences and outcomes. As Project Innovate celebrates its first birthday, I think the FCA can look back on a pretty successful first year - so far this initiative has managed to help over 175 innovative businesses.
In order to build upon the very successful start to Project Innovate, we now know that the FCA is currently looking into the feasibility of developing a 'regulatory sandbox'. This will be a safe place for businesses to test innovative products, services, business models, without immediately having to be constrained or put-off by the normal regulatory consequences.
The FCA believes a regulatory sandbox has the potential to deliver more effective competition and improve consumer outcomes in three key ways:
Apparently the FCA intend to open a sandbox unit in the spring of 2016. Over the course of the next few months the regulator will be working with interested parties to design how this unit will operate. We understand that in the first year, the FCA will trial the regulatory sandbox with a limited number of firms and then develop a more permanent sandbox framework.
I'm pleased to say that Instinct has already had an opportunity to meet the Project Innovate team and we certainly found their 'informal steer' valuable to our solution development. I hope this latest initiative gives other FinTech companies the confidence to get out there and invent new solutions. UK financial services needs to encourage more game-changing ideas and we're absolutely delighted that the FCA is helping to facilitate what promises to be a very exciting few years of innovation!
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
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Nkahiseng Ralepeli VP of Product: Digital Assets at Absa Bank, CIB.
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