Facilitating the UK’s FinTech growth – Innovation in Regulation
Security & Regulation The government is determined that the UK establishes itself as the world’s leading FinTech hub and we are committed to helping our FinTech sector to grow.
We all know that London is the world’s leading financial centre and a natural source of digital innovation for and within financial services. However, we must look for opportunities across the country, making sure that London is able to work with regional centres so that the UK can dominate the global FinTech landscape.
To do this the government must follow through on its promise to create an environment that encourages greater innovation from both within the established sector and from new entrants.
And this work is already in train. We have already introduced changes that have opened up the market to alternative financing providers for business lending, started to explore the opportunities from digital currencies and worked with the banks to deliver an open Application Programming Interface (API) standard in banking. Additionally, as more and more services come to market, we have remained vigilant about consumer protection while at the same time granting industry the flexibility to innovate. This has included establishing the new Payments Systems Regulator (PSR), working with the Financial Conduct Authority (FCA) to launch Project Innovate and to investigate the feasibility of a regulatory sandbox and to identify opportunities for “regtech” to deliver regulatory requirements.
In addition to these existing efforts, we are pushing ahead to launch a FinTech benchmarking exercise to consider the UK’s performance and position against other countries and examine best practices from around the world to help identify emerging opportunities. The government will also continue to consider new opportunities for reducing red tape for innovative FinTech companies, lessening friction and regulatory burdens without sacrificing governance or consumer protection.
With more than half a billion pounds invested in UK FinTech in 2014 (representing more than half of the total FinTech investment in all of Europe)[i], the UK has already established itself at the forefront of innovation and the government looks forward to working with industry in order to consolidate this position for the future.
[i] http://www.cityam.com/212533/fintech-investment-triples-122bn-europe-experiencing-biggest-growth (NB: USD figures, not GBP Sterling as in original draft)