Britain’s financial regulator is the first to launch a fintech accelerator
The FCA is getting experimental with fintech.
The financial regulator is launching an experimental scheme which will allow new financial technology companies to test out innovations which are as yet unregulated to foster innovation in the market.
The so-called sandbox project is the first of its kind to be directly led by a financial regulator and will act in a similar way to well-established tech accelerators and incubators but with a focus on technology regulation.
A "relatively small" number of fintech firms will be welcomed into the first cohort due to the intensive amount of time and attention they will receive from the financial conduct authority.
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The FCA will look for startups which are "genuinely innovative", for the benefit of consumers in the UK as well as be ready to test being close to market.
The experimental approach will see trials among real consumers and current rules potentially put aside, but only during the test period, which will abide by strict rules laid out at the start "on a case by case basis".
The scheme was announced by the FCA's director of policy risk and research, Christopher Woolard, at the Innovate Finance Global Summit on Monday.
He said: "This is a bold and complex project for any regulator to undertake. As well as significant potential benefits, it comes with risks. In many ways, it won’t just be the firms that are learning in the sandbox, we will be too. The firms that are successful will be able to test out their innovative ideas without immediately incurring all the normal regulatory consequences."
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The sandbox, which launches 9 May, follows the success of the FCA's Project Innovate, which has been working closely with startups seeking authorisation since 2014.
The government also announced new support for firms looking to expand internationally, called the Fintech Bridge, and plans for a dedicated fintech panel which will set out a strategy for the sector.
"The measures announced today show that we are not resting on our laurels and are committed to initiatives which will make our fintech sector even stronger," said economic secretary Harriett Baldwin.