Technology plays a fundamental and increasingly pivotal role in delivering innovative financial products and services. The FCA is 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.
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 will be holding our next TechSprint on the theme of mental health on 14-15 March 2017. Hosted by PwC, this event will set participating teams the challenge of developing technology tools and concepts to help break the link between financial difficulty and mental health problems. Research by the Money and Mental Health Policy Institute has found that people with mental health problems are three times as likely to be in financial difficulty.
Over 100 developers, mental health and technology experts and around 35 organisations will be taking part in the TechSprint. Participating organisations include Aire, Barclays, Baringa, BUPA, Burgess Salmon, CamCog, Capital One, Digital Space, Eclipse Experience, E3CT, High Tech Bristol & Bath CIC, Hitachi, IBM Watson, Imperial College London, iProov, Lloyds Banking Group, Monzo, Nationwide, Nexus CX Ltd, NHS, Optimity Advisors, Play-Consult, PwC, RBS, Rethink Mental Illness, Royal College of Art, Santander, Shift Design, Startupbootcamp and University of Southampton.
On day two, the teams will present their concepts to an audience of senior representatives from financial services firms, consultancies, FinTech companies and mental health experts. A cross-industry judging panel will then assess collaboration; whether the teams answer the challenges and address the theme appropriately; and how effective and innovative their ideas are.
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.
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@example.com.