Barclays, First Direct and Nationwide join FCA sandbox cohort

Barclays, First Direct and Nationwide join FCA sandbox cohort

Alongside the usual mix of AI and DLT-based startups, the third edition of the Financial Conduct Authority's regulatory sandbox includes propositions from three of the biggest banks on the high street - Barclays, HSBC's First Direct and Nationwide.

The FCA sandbox first opened for application in June 2016 to provide a safe space for firms to test innovative products, services or business models in a live user environment. Since then, the FCA has received 146 sandbox applications. Of these, 50 were accepted and 41 progressed to testing which has been run in two cohorts.

For the third round, the watchdog says that it received 61 submissions, with 18 making the final cut.

Christopher Woolard, executive director of strategy and competition at the FCA, says: "It is particularly encouraging that we are now seeing more applicants from outside London and a broader range of firms testing in the sandbox. As we open the application window for our next sandbox cohort, we continue to encourage applications from firms of all sizes and from a wide range of sectors, including sectors we haven’t seen heavily represented in the sandbox to date.”

While attracting the usual mix of innovative applicants from the startup world, the third edition of the sandbox also welcomes Barclays, FirstDirect/HSBC, and Nationwide to play in the pit.

Barclays is floating a RegTech proposition which tracks updates to regulations within the FCA Handbook and aligns their implementation to Barclays’ internal policies. First Direct is testing an app from Bud which learns customers attributes from transactional and demographic data to identify financial and non-financial products from a marketplace of first direct, HSBC and external institutions. Nationwide is venturing into the robo-advisory space with an an automated solution providing digital savings guidance and investment advice.

This is not the first time the sandbox has opened up to incumbents. For the inaugural round of participants, HSBC tested an app developed in partnership with Pariti Technologies to help customers better manage their finances, while Lloyds banking Group experimented with a new approach for branch banking.

With the third cohort finalised, the FCA has opened application for the fourth sandbox phase, which will commence in June 2018. Firms have until 31 January 2018 to submit their applications.

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