The UK Financial Conduct Authority (FCA)’s chief data, information, and intelligence officer, Jessica Rusu, shows how the FCA’s Digital Sandbox helps fintechs develop innovative proofs of concept.
With the introduction of a Digital Sandbox, the Financial Conduct Authority (FCA) of the UK is upping its innovation game. According to Jessica Rusu, chief data, information, and intelligence officer, the platform will aid fintechs in creating new proofs of concept for goods and services.
The Digital Sandbox is expected to provide synthetic transaction and market data, investment data, Company House data, and Covid data. Additionally, it will have a public “API marketplace” with access to other fintech datasets.
The sandbox will be accessible to applicants before, during, and after certain TechSprint activities, according to Rusu. From the summer of 2023, a wider spectrum of innovators will have access to its enhanced offerings. “We benefit from supporting this innovation by promoting solutions to complex regulatory challenges like APP fraud, greenwashing, and scam detection,” she continued.
Reduced regulatory burden for the UK’s regulated firms is one of the FCA’s main objectives. By offering a single point of entry, the digital front door will make it easier for businesses to interact with the regulator’s innovation services. The agency has also implemented digital tools, such as digital assistants for FAQs and decision trees.
“UX continues to be a major focus of our work,” said Rusu, noting that the regulator had simplified its Innovation Pathways and Sandbox application forms to offer a more user-friendly process.
Predictive analytics have also been implemented by the FCA to decrease late firm filings, which aids in timely data submission and lowers late fees for firms. In order to lessen the regulatory burden on businesses, the regulator has teamed up with the Bank of England for the Transforming Data Collections initiative.
The FCA is working with peers elsewhere as well. The Global Financial Innovation Network (GFIN), which was established in 2019 by a group of 23 regulators, aims to facilitate more effective cross-border interactions between innovative enterprises and regulators. According to Rusu, the regulator is collaborating with its GFIN partners to hold a worldwide TechSprint that is a first in the effort to combat greenwashing.
To address challenges relating to greenwashing, the TechSprint will bring together technological professionals, businesses, and an international group of regulators. The virtual TechSprint will utilize the regulator’s synthetic data testing tool and run in the Digital Sandbox.
In May, the regulator will also hold a TechSprint with an emphasis on information from the Financial Services Register. The FCA intends to look into new ways that third-party organizations, like as comparison websites, can use Register Data to give investors more proactive access to information.
We have our lasers on this subject because there is a possibility that businesses may exaggerate their sustainability credentials in order to entice customers and investors as the demand for ESG-related products and services rises, according to Rusu.
The regulator is working on artificial intelligence, TechSprints, innovative company partnership, and international regulatory coordination.
Rusu says we’ve worked hard to understand AI, think about legislation, and use AI to catch bad actors.
She continued by saying that the regulatory body is working with the Digital Regulation Cooperation Forum and considering what the ideal framework for AI in financial services may include.
London-based NayaOne celebrates winning FCA’s Digital Sandbox tender, demonstrating their commitment to fintech innovation and vision.
Karan Jain, CEO of NayaOne, is excited to work with the FCA in fostering innovation in financial services, utilizing their digital transformation platform and synthetic data technologies to assist fintech companies in developing and testing their products, while also looking forward to growing their relationship with the FCA.