Innovate: RegTech

Technology plays a fundamental and increasingly pivotal role in delivering innovative financial products and services. We are committed to fostering innovation and technology – including RegTech – to promote effective competition in the interests of consumers.

RegTech is a sub-set of FinTech that focuses on technologies that may facilitate the delivery of regulatory requirements more efficiently and effectively than existing capabilities.

Call for input

We issued a call for input on 23 November 2015 to better understand how we can support the adoption and development of RegTech. Respondents expressed a variety of views about different types of RegTech and their uses; what our role could be; and what the blockers to innovation and adoption are.

We published a feedback statement on the RegTech call for input in July 2016. This report provides a summary of the key themes from the responses and outlines the FCA’s next steps in relation to RegTech.

TechSprint events

We have recognised that there is an opportunity to bring market participants together to work collaboratively on shared challenges to assess and solve important problems in financial services.

We piloted our first TechSprint event in April 2016 which sought to identify potential solutions to access issues in financial services. TechSprints are held over two days and bring together teams from across financial services and the technology industry to develop ideas or proof of concepts to address a particular issue.

Our April event was held in support of our Occasional Paper on 'Access to financial services'. To our knowledge it was a global first for a regulator to hold an event of this kind and it was a success in that three of the ideas generated are now being explored commercially as products to bring to market.

Financial services and mental health TechSprint

In partnership with the Money and Mental Health Policy Institute, we held our third TechSprint on the theme of mental health on 14 and 15 March 2017. Hosted by PwC, this event challenged the participating teams to develop technology tools and concepts to help break the link between financial difficulty and mental health problems.

Video: Financial services and mental health TechSprint

Hear from the developers and experts at our event

Over 100 developers, mental health and technology experts and around 32 organisations took part in the TechSprint. There was a strong focus from all teams on designing concepts that encouraged people to continue to manage their own finances but put in place safeguards to help them when they felt they needed it most.

A common theme was to designate a buddy or guardian who would be asked to check unusual activity on a current account or verify a purchase. The concepts developed also linked into budgeting and being able to see what you are spending and when. This meant that many of the tools could be used by a wide range of people, not only those who experience mental health problems.

This TechSprint event supports our commitment to help consumers in vulnerable circumstances, including those with mental health problems, receive fair treatment from their financial services providers. Our aim is that the TechSprint will drive continued collaboration across industry.

In 2015 we published an occasional paper on consumer vulnerability, which called on financial services firms in the UK to improve their approach in dealing with vulnerable customers. We are continuing to encourage good practice by working with financial services firms, stakeholder groups and consumer bodies and by integrating awareness of consumer vulnerability issues within our regulatory approach.

Above you can watch the video that captures the event and explains more about the challenges faced by over 11 million consumers in the UK and how technology can help.

Unlocking regulatory reporting TechSprint

We held a TechSprint on 9-10 November 2016 on the topic of ‘Unlocking Regulatory Reporting’. Around 100 developers and 30 organisations took part with the aim of identifying potential solutions to help address the cost, efficiency and effectiveness of regulatory reporting.

The ideas generated spanned the whole process of regulatory reporting, starting with converting the Handbook into machine-readable text and using this to enable automated advice or personalised filtering that uncover which parts of the Handbook would apply to a particular type of firm. Other teams re-interpreted how regulatory reporting could be undertaken – moving from firms ‘pushing’ reports into the FCA, with the regulator storing all this data, to a possible scenario of the FCA ‘pulling’ the agreed data instantaneously from firms as required.

Given the relevance of this topic to a wider audience, on 14 March 2017 Jo Hill, Director of Market Intelligence Data and Analysis at the FCA, hosted a follow up event on unlocking regulatory reporting. This was attended by representatives from financial services and RegTech firms, academics and professional service firms. The event began with a panel session, where we were joined by representatives from Santander, Suade, Credit Suisse, Barclays and UCL to discuss the future of RegTech, the challenges that we face and how we can work together to overcome them.

The teams from our November TechSprint also presented the ideas they came up with and the audience were able to critique the concepts and ask questions about how the prototypes would work in practice. This triggered some interesting ideas and debate highlighting both the challenges and opportunities for the industry as they look to use technology to solve problems. As the regulator we think we can play a facilitative role and help solve some of these challenges.

Events like this are continuing the dialogue with the financial services and fintech industries as well as keeping the issue of emerging technologies on our radar.

We will continue to use TechSprints as one of our regulatory tools to explore solutions to other challenges and act as a catalyst for change that helps to unlock the potential benefits of technology innovation.

You can view the Twitter feed of our TechSprint events using #FCASprint. You can also watch videos of our previous events below.

If you have any comments or queries for the RegTech team email [email protected].

TechSprint event: unlocking regulatory reporting

Watch a video of the November 2016 TechSprint event.

TechSprint event: consumer access

Watch a video of the April 2016 TechSprint event.