The Global Financial Innovation Network (GFIN) was formally launched in January 2019 by an international group of financial regulators and related organisations, including the FCA. This built on the FCA’s early 2018 proposal to create a global sandbox. The FCA now leads and chairs the Network.
The GFIN is a network of 50 organisations committed to supporting financial innovation in the interests of consumers.
The GFIN seeks to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. This includes a pilot for firms wishing to test innovative products, services or business models across more than one jurisdiction.
It also aims to create a new framework for co-operation between financial services regulators on innovation related topics, sharing different experiences and approaches.
As part of its commitment to be an open initiative, the GFIN launched its own website in January 2020. The website provides information about the GFIN’s membership, cross-border testing and all the GFIN’s existing publications.
GFIN – development and progress
In June 2019, the GFIN published a report setting out the progress made in its first year, the challenges it has faced, and its ambitions and plans for the future. It also describes the work done to engage with stakeholders.
The GFIN was originally proposed in a consultation paper in August 2018. The GFIN received 99 responses from 26 jurisdictions in response to the consultation paper. The response from industry and other international regulators was overwhelmingly positive in favour of establishing the GFIN to facilitate a new practical method of regulatory collaboration on innovation and creating an environment for cross-border testing.
Following this consultation, the GFIN finalised terms of reference for governance and membership of the group and confirmed 3 primary functions:
- To act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models, and to provide accessible regulatory contact information for firms.
- To provide a forum for joint RegTech work and collaborative knowledge sharing/lessons learned.
- To provide firms with an environment in which to trial cross-border solutions.
After the end of the consultation, the GFIN discussed further development of our core functions and next steps of the network. Alongside discussions on the sharing of experience, regulators involved agreed to launch a pilot phase of cross-border testing (for firms) and to formalise the membership and governance structure for regulators and international organisations interested in joining the Network.
Following the consultation feedback, the GFIN:
- Opened a 1-month application period for a pilot phase of cross-border testing. Interested firms were invited to submit applications to relevant participating regulators by 28 February 2019. We announced next steps on the pilot on 29 April 2019.
- As part of the finalised terms of reference for governance and membership, expanding from the founding 12 members, the group now includes 50 organisations. Financial regulators and related organisations with a commitment to supporting innovation in the interest of consumers are invited to join.
Cross-border testing – next steps
In April 2019, the GFIN announced plans to take forward its cross-border testing pilot. Out of 44 unique applications submitted across 17 participating regulators, GFIN assessed that eight firms were suitable to move to the second phase of the process, i.e. working with regulators to develop testing plans for their cross-border trial. Four of these firms were proposing tests to work with the FCA.
At this time, GFIN regulators are unable to take forward any of the eight firms to begin full cross-border testing. For various reasons, regulators involved have determined that the firms were not ready to test. GFIN is exploring how we might be able to assist these firms in other ways, either outside the GFIN framework or inviting them to re-engage with the Network when they are closer to being ready to test.
Additional information about wider cross-border testing, including GFIN’s next steps post-pilot, is available on the GFIN website.
As part of the Network’s commitment to an open dialogue with stakeholders, GFIN has prepared the “Cross-border testing: lessons learned” report to reflect on what we have worked on since the application period in early 2019, including our achievements and the challenges we have faced. The report also includes next steps and our forward work programme as agreed by members at our recent workstream meeting in Montréal in October 2019.