regtech -the fca approach · we held our first techsprint in april 2016: a two -day technology...
TRANSCRIPT
QEDRegTechSummit- 10January2017
RegTech- TheFCAApproach
NickCookHeadofData&[email protected]
FinancialConductAuthority
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Definition and Background
Definition:theadoptionanduseoftechnologytoassistfinancialservicesfirmstounderstandandmeettheirregulatoryrequirementsmoreefficientlyoreffectively
FCA’sProjectInnovatelaunchedinOctober2014,to:• Encourageinnovationintheinterestsofconsumers• Promotecompetitionthroughdisruptiveinnovation
Following a Government Office for Science report on how to support growth anddevelopment of the UK’s FinTech market in March 2015, we have been encouragingthe development and adoption of RegTech, as part of our Project Innovate activities.
ProjectInnovate
RegulatorySandbox
InnovationHub
RegTech AdviceUnit InternationalCooperation
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Our Activities to Date
We’veengagedandlistenedattentivelytothemarket.InNovember2015,weissuedaCallforInput(CFI),whichattractedover350responsesfromacrosstheRegTechecosystem.WeaskedtheindustryforitsviewsonhowRegTechmaydevelopandwhatroleweshouldplay.WepublishedourFindingsinJuly2016.
Ourobjectiveistoencouragetechnologicalinnovationthatimprovescompliancewhilereducingthecostofregulation.Ourfirstyearactivitiesfocussedaroundbuildingourunderstandingandcredibility
WeheldourFirstTechSprintinApril2016:atwo-daytechnologyinnovationeventaimedatfindingsolutionstodigitalaccessproblemsfacedbyconsumers.Aglobalfirstforafinancialservicesregulator.
OursecondlargerTechSprintinNovember2016addressedthethemeof‘UnlockingRegulatoryReporting’,wheretechnologydirectlyimpactstheinterfacebetweentheregulatorandtheregulated.
#FCASprint
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Our LearningsWe’vesoughttounderstandtheRegTechandFinTechecosystemandtherolesplayedbyaccelerators,incubators,investors,consultancies,academia,establishedtechnologyfirms,start-ups,tradebodiesandregulatedfirms.
Inourcallforinputfindings,wegroupedtechnologyinnovationsinto4themes:
Efficiencyandcollaboration - Technologyforefficientinformationsharing[e.g.alternativereportingmechanisms,sharedutilitiesandonlineplatforms]
Integrationstandardsandunderstanding – Technologytoclosethegapbetweenintentionandinterpretation[e.g.semantictechnologies,datapointmodels,APIs,androbo-handbook]
Predict,learnandsimplify – Technologytosimplifydata,aiddecision-making,andfacilitateadaptiveautomation[e.g.dataanalytics,real-timecompliancemonitoring,tradesurveillancesystems,machinelearningandcognitivesystems]
Newdirections– Technologythatallowsregulationandcomplianceprocessestobedelivereddifferently[e.g.DLT,automatedcompliancesystems,machine-readableregulation,andbiometrics]
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Barriers and Issues
o Difficultieswithadoptingandintegratinginnovativetechnologiesontoexisting/legacy ITinfrastructure.
o FinTech/RegTechinnovatorsrestrictedaccess toincumbentfinancialservicesfirms.
o RegTechinnovatorsareconcernedaboutprotectingtheirintellectualproperty andachievingalong-termcompetitiveadvantage.
o Limitedestablishedstandards infinancialservicesmakingengagement,contractingandadoptionofRegTechsolutionsbyfinancialservicesfirmsexpensive,complexandrisky.
o Theregulatoryposition onFinTech/RegTechsolutionsisunknown.
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Our Potential Role
EstablishingStandards - Clarifyingourexpectationsandhelpingdefineindustrystandardsandbestpractice.
CatalystandConvener– Engagingwithandbringingparticipantstogether;Sharingourviewsonpriorityareasoffocusandfuturedirection.
Certification - FCAapprovalorcertificationofsolutionsthatmeetrelevantcriteria.
LeadingbyExample - FCAtrialling/adoptinginnovativetechnologiesitself.
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LookingAhead
TechSprints TechTalks TechKnowAcceleratorsTechShows Trials,ResearchandCollaboration
ConsumerPriorities(Access,Vulnerability,MentalHealth)
Real-TimeandNearReal-TimeComplianceSupport,MonitoringandSurveillance
RegulatoryInterpretationandReporting
Others
AML,KYC