DI-M02: Rejection rationale/ eligibility criteria applicants are failing to meet the criteria to enter innovation programmes
2025/26 values
Table: Innovation services rejection criteria
| No. accepted | Acceptance rate | % of declined applications per different criteria | |
|---|---|---|---|
| Regulatory Sandbox | 14 | 10% | Not Met: Need for support criteria Not Met: Genuine innovation criteria Not Met: Readiness criteria Not Met: Consumer benefit criteria Not Met: In scope criteria |
| Innovation Pathways | 23 | 20% | |
| Digital Sandbox | 26 | 34% | % of applications that did not meet need for support: % of applications that did not meet genuine innovation: % of applications that did not meet consumer benefit:
|
| Total across all services | 63 | 19% |
Source: FCA data
19% of applications across all services were accepted. A further 35 (9.5%) are going through the assessment process. Acceptance rates for RS and IP were lower. This reflects higher volumes and some firms using other support routes where more appropriate, such as the pre-application support service. For RS, we prioritise firms that are ready to test in a live environment and can move quickly towards authorisation, including applying for authorisation within 3 months. We also introduced proportionate assessments of firms’ applications for authorisation in the Regulatory Sandbox, tailoring our approach to support faster testing where restrictions apply. Despite the increased application volumes, we provided support to a similar number of firms to the previous year.
Need for support and genuine innovation were more common reasons for declining applications. This may be informed by factors including changing market trends, new regulatory regimes or guidance issued by the FCA, and certain ‘use cases’ transitioning from genuinely innovative towards becoming more conventional.
2023/24 and 2024/25 values below, do not separate by RS/IP/DS, so are presented in a different format.
2024/25 values
53% of applications assessed during the period were accepted for full support, with 9% of applications still to be assessed.
38% of applications were declined for full support. We sign-posted a number of declined applications to relevant material and documents to help their development and/or refer them to colleagues, for example better suited services the FCA offer such as pre-application meetings with authorisations colleagues. Similarly, a 4-week trial period might be offered to Digital Sandbox applicants to explore the digital sandbox.
- A third (32%) of these applications failed to meet 2 or more of our eligibility criteria.
- The majority of declined applications (44%) did not meet the Need for Support criterion. To be eligible for support, firms must be able to describe why they need it, for example if firms have questions where it is unclear how our rules apply to an innovative business model or what dataset(s) they require.
- 39% of declined applications did not meet the Genuine Innovation criterion. While we take a broad view of innovation, we expect firms to set out a case for why their proposal is innovative and how it compares to alternatives in the market.
- 18% of declined applications did not meet the Consumer Benefit criterion by not demonstrating how their proposal helps consumers, or how they will protect consumers from risks the proposition poses.
- 25% of declined applications did not meet the Readiness criterion. Reasons include having a proposal that is not clearly defined or not developed enough for us to provide realistic support, or firms not carrying out the required background research and make a good faith attempt to understand their regulatory obligations before requesting support.
Source: FCA data
2023/24 values
29% of applications assessed during the period were accepted for full support. 71% of applications were declined for full support.
More than two thirds of these applications failed to meet 2 or more of our eligibility criteria:
- 70% did not meet the Need for Support criterion. To be eligible for support, firms must be able to describe why they need it. For example, if firms have questions where it is unclear how our rules apply to an innovative business model.
- 48% did not meet the Genuine Innovation criterion. While we take a broad view of innovation, we expect firms to set out why their proposal is innovative and how it compares to alternatives in the market.
- 48% did not meet the Consumer Benefit criterion by not showing how their proposal helps consumers (either individuals or businesses), or how they will protect consumers from risks the proposition poses.
- 45% did not meet the Readiness criterion. Reasons include having a proposal that is not clearly defined or not developed enough for us to provide realistic support, or firms not carrying out the required background research and making a good faith attempt to understand their regulatory obligations before requesting support.
Source: FCA data