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Industry heavyweights establish Alliance to modernise financial regulation

Industry heavyweights establish Alliance to modernise financial regulation

Co-founded by Jo Ann Barefoot, former deputy comptroller of the currency and David Ehrich of fintech credit card startup, Petal, The Alliance for Innovative Regulation (AIR) has been launched to help regulatory agencies deal with the technological challenges posed by fintech innovation.

“Facebook’s Libra announcement is the latest recognition that fintech innovations are outpacing the tech-readiness of our system,” says Barefoot. “To keep up with the exponential change of technology, regulators have to radically decrease innovation cycle-time and adapt quickly to new technologies."

AIR has raised $2m in funding from fintech entrepreneurs and venture capitalists including a 3-year seed grant from Flourish (a venture of the Omidyar Group) and is taking it cue from forward-thinking regulatory bodies like the UK's Financial Conduct Authority (FCA) and Singapore's MAS in finding new models to handle financial innovation,

Earlier this year, AIR worked with the FCA to organise the first-ever TechSprint on Financial Crime in Washington, DC, using  a “hackathon” format to help regulators source new technological solutions to age-old intractable problems.

The event gathered 65 regulators from 16 agencies, which resulted in AIR providing technical assistance to six regulatory agencies on tech sprints.

“New and emerging technologies are poised to transform financial regulation, and AIR is a needed bridge between innovators and financial regulators,” says Thomas Curry, former comptroller of the currency and AIR board member. “The magic is when you sit an industry technologist side-by-side with a regulator to solve a mutual pain point. Diverse teams working in an intense problem-solving session can deliver results that are supercharged.”

Earlier this week, US regulatory agencies joined the Global Financial Innovation Network, an international network of policy-makers co-ordinated by the FCA that works collaboratively to promote knowledge-sharing on innovation in financial services.

“In recent years there has been a growing enthusiasm on the part of US Regulators to embrace new technologies and collaborate internationally,” says Nick Cook, director of innovation at the FCA . “By joining the Global Financial Innovation Network and playing an integral role in international events such as TechSprints, US regulators are recognising the importance of cross-border collaboration in driving digital transformation across global regulatory system.”

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