The Financial Conduct Authority is working with the Bank of England on a blockchain-based digital regulatory reporting initiative to tackle the growing costs of compliance checks.
Speaking at the annual Mansion House gathering in the City of London, FCA chief Nikhil Rathi said that regulatory reports are estimated to cost between £1.5bn to £4bn a year, with 20,000 rules across 58,000 firms.
"That’s why we’re working with the Bank of England on the Digital Regulatory Reporting Initiative," he told the audience. "By connecting to firms through blockchain and API technology and implementing machine readable and executable regulation, compliance checks can be completed in near real time."
In July, the FCA announced plans to extend its influence across the whole of the UK, opening an office in Leeds with at least 100 staff recruited in the first phase and doubling its headcount in Edinburgh to over 200 in the next two years.
Rathi says many of the new staff recruited will be data scientists and data analysts. The regulator has budgeted for a £120 million spend on its data trolling capabilities over the next three years with the aim of being more proactive and acting faster to root out abuses.
The FCA chief pointed out that the agency will be regulating more data-heavy businesses, noting that as demand for data increases, firms may be able to use, market or restrict data in ways which create poor user outcomes.
"Our wholesale data Call for Input showed that some market participants believe trading data licensing fees are too complex, benchmark switching costs too high and data vendors are subject to high barriers to market entry," he says. "We’ll be publishing feedback before the end of the year and setting out what further steps we may take, considering the full range of our powers."