Following the publication of our paper on the experience of firms through the FCA’s sandbox, the FCA has announced further developments in relation to the way it engages with innovation.
At an event last week, the FCA talked about the different forms of support available to drive innovation under the FCA Innovate initiative. The Advice Unit now has a wider range of specialist contacts – ranging from mortgages to debt counselling - that provide regulatory advice to firms. Additionally, Direct Support is a good first point of contact for innovative firms who want to explore the regulatory support available. Interestingly the behavioural science team is also aligned to Innovate, helping firms to understand how consumers may respond to their products.
In response to the growing concern around climate risk, the FCA will support their first “green” cohort, admitting firms who have solutions that facilitate UK’s transition to a green economy. Applications close on 11 Jan but firms are encouraged to apply as early as possible.
While the FCA has been exploring Regtech for a while, its own innovation efforts is now formally under the Innovate umbrella.
The revised structure of the Innovate team formally brings the FCA’s internal and external initiatives to support innovation under one umbrella. It also helps firms to choose the most appropriate support. Not everyone wants to play in the sandbox and now the alternative regulatory support options are clearly signposted and easily accessible.
Bringing the green agenda under the Innovate initiative is an interesting development and indicates how the Innovate initiative may evolve. I would not be surprised if further social and public policy issues that intersect with FS are tackled through special cohorts in future.
Our job is to make markets for financial services work well. Part of that is ensuring that financial services are adequately prepared to cope with the changes on the horizon.