The secondary objectives introduced by the Financial Services and Markets Act (FSMA) include key requirements to assess the performance of the FCA and PRA in achieving their objectives around UK fintech competitiveness. FSMA gives the Treasury the power to set performance metrics to measure this performance. In its submission, Innovate Finance put forward a set of metrics and actions to ensure in line with these goals.

In light of the Consumer Duty, Innovate Finance called for a review of all existing consumer regulations to assess any duplication or contradiction with the new Consumer Duty and repeal old ‘tick-box’ regulations.

As part of its proposals, Innovate Finance has called for:

• A new ‘RegTech test’ to be undertaken when the FCA or PRA introduce any new regulations to assess how technology can best enable regulatory compliance.
• A move away from a ‘one size fits all’ approach to regulation where the smallest firms have to meet the same requirements as the largest firms.
• Better resources and expertise in the regulator to understand and support innovation. These shall include: dedicated account managers for FinTechs after they graduate from sandbox and growth programmes, providing them with the same ‘named contact’ supervisors that large incumbent institutions enjoy; more interchange between industry and the regulators (eg. secondments, joint training programmes and external hires); and faster authorisations to reduce delays in appointing key personnel and regulatory market approvals for FinTechs.

In a press release on the news, Janine Hirt, CEO at Innovate Finance, commented: “Over the last decade the UK has been the leading hub for FinTech globally, supported by regulators who have embraced innovation. However, as other countries are catching up, we risk falling behind unless our regulators continue to innovate. The UK is one of the best places in the world to start and scale a FinTech, driving talent, capital and international business into the UK economy. This is also determined by a dynamic and proportionate regulatory environment that can position the UK as the global epicentre for FinTech.

“As technology, and the FinTechs who enable it, become central to financial services we need to see new regulatory approaches that support innovation. We also welcome new policies that can create more agile regulators that can protect both consumers and market competitiveness and enable innovation in financial services,” Hirt stated.