HSBC and Lloyds among first FCA sandbox cohort; applications invited for next round

HSBC and Lloyds among first FCA sandbox cohort; applications invited for next round

The Financial Conduct Authority is inviting fintech startups and banks to apply to join its second regulatory sandbox cohort, where innovative financial products can be tested before proceeding to authorisation.

Applications for the second cohort will open on 21 November and close on 19 January 2017, with testing commencing in May.

The watchdog received applications from 69 firms, 24 of whom were deemed to meet the sandbox eligibility criteria for its first round of testing, including early stage start-ups, challengers and incumbent firms. Of these, 18 have been deemed ready to proceed, with the first short-term and small-scale trials commencing shortly.

Among the incumbents, HSBC will test an app developed in partnership with Pariti Technologies to help customers better manage their finances, while Lloyds banking Group is experimenting with a new approach for branch banking, aligning the physical experience with online and phone-based services.

Others to make the cut, include:

  • Billon - an e-money platform based on distributed ledger technology that facilitates the secure transfer and holding of funds using a phone based app
  • BitX - a cross-border money transfer service powered by digital currencies / blockchain technology
  • Blink Innovation Limited - an insurance product with an automated claims process, which allows travellers to instantly book a new ticket on their mobile device in the event of a flight cancellation
  • Bud - an online platform and app which allows users to manage their financial products, with personalised insights, on a single dashboard. Bud's marketplace introduces relevant services which users can interact with through API integrations
  • Citizens Advice - a semi-automated advice tool which allows debt advisers and clients to compare the key features of available debt solutions
  • Epiphyte - a payments service provider that aims to provide cross-border payments using blockchain technology
  • Govcoin Limited - a technology provider that has partnered with the Department for Work and Pensions (DWP) to determine the feasibility of making emergency payments using means other than cash or the Faster Payments Scheme. The payments platform will use blockchain to allow the DWP to credit value to a mobile device to transfer the value directly to a third party
  • Issufy - a web-based software platform that streamlines the overall Initial Public Offering (IPO) distribution process for investors, issuing companies and their advisors
  • Nextday Property Limited - an internet-based property company that will provide an interest free loan for a guaranteed amount to customers if they are unable to sell their property within 90 days
  • Nivaura - a platform that uses automation and blockchain for issuance and lifecycle management of private placement securities
  • Otonomos - a platform that represents private companies’ shares electronically on the blockchain, enabling them to manage shareholdings, conduct bookbuilding online and facilitate transfers
  • Oval - an app which helps users to build up savings by putting aside small amounts of money. These savings can then be used to pay off existing loans early. Oval will be working with Oakam, a consumer credit firm, and a number of their customers during the test period
  • SETL - a smart-card enabled retail payment system based on their OpenCSD distributed ledger
  • Tradle - an app and web-based service that creates personal or commercial identity and verifiable documents on a distributed ledger. In partnership with Aviva they will provide a system for automated customer authentication
  • Tramonex - an e-money platform based on distributed ledger technology that facilitates the use of “smart contracts” to transfer donations to a charitySwave - a micro savings app that provides an across-account view; enables a round-up service every time a user spends money and calculates an affordable savings amount based on the user’s spending behaviour

Christopher Woolard, executive director of strategy and competition at the FCA, says: “It has been an intense process for both firms and ourselves and we are grateful for their cooperation and hard work in getting us all to this position. We look forward to these businesses bringing new products and services to market whilst we ensure that appropriate consumer protection safeguards are in place.”

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