Financial Conduct Authority promises 'easier' regulation for new technology services

The Financial Conduct Authority (FCA) says it wants to make easier for financial technology startups to meet regulatory requirements.

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The Financial Conduct Authority (FCA) says it wants to make easier for financial technology startups to meet regulatory requirements.

In a speech given by FCA chief executive Martin Wheatley to a Bloomberg conference in London, the new financial regulator set out what it wanted to do for companies in growth financial services areas like mobile banking.

Wheatley said: "There are questions over innovation in the market, new products or business models. We want firms to have the freedom to break new ground. But we know there would be limited societal appetite to accept business failure if things went wrong as a result.

"So where does this leave the financial sector as we explore the possibilities of technology and trends like peer-to-peer lending?"

He warned it was "imperative for the UK’s financial sector to resist future temptation to enter into a regulatory race to the bottom when the good times roll."

Wheatley said the FCA had launched Project Innovate, "to make sure positive developments - ones that genuinely promise to improve the lives of consumers or clients - are supported by the regulatory environment".

He said priority areas in this area included mobile banking, online investment or money transfer - such as apps that allow you to take a picture of a bill and make payments.

The FCA says it wants to encourage large and small firms who are developing innovative services that aren’t explicitly addressed by current regulation, or where the guidance may be "ambivalent".

"We will be opening up a hub in our policy team which will pull together FCA expertise to support innovators in two distinct ways," said Wheatley.

"We will be providing help to firms who are developing new models or products, with advice on compliance so they can navigate the regulatory system. And secondly, we will be looking at areas where the system itself needs to adapt to new technology or broader change – rather than the other way round."

Wheatley added that the FCA will be launching an "incubator" to support "innovative, small financial businesses ready themselves for regulatory authorisation".

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