The government’s vision is for UK financial services to be the most competitive and innovative in the world, supplementing existing services with greater choice and value for consumers.
The innovation plan covers how financial services regulators are adapting and encouraging new technologies and disruptive business models, and better utilising new technologies to reduce regulatory burdens on business.
The plan covers the work of the financial services regulators: FCA, Payment Systems Regulator (PSR), PRA and the wider Bank of England.
With a focus on FCA:
The government has already taken significant action to reach this vision. This includes:
- The introduction of Project Innovate
- driving industry to deliver the Current Account Switch Service (CASS)
- legislating to require the big banks to share SME credit data so alternative finance providers, including FinTechs, are more able to compete
- supporting industry to develop an open banking standard for application programming interfaces (APIs), following the publication of the Competition and Markets Authority (CMA) retail banking market investigation
FCA is undertaking a wide range of workstreams to further embed innovation and competition within its approach:
- FCA has facilitated a series of themed weeks, designed to stimulate intense engagement with stakeholders interested in a particular area of innovation. The first of these events focussed on robo-advice (i.e. automated advice), and the second on innovation in payments. Over the coming months the FCA will also be holding themed weeks on InsurTech and Blockchain
- the FCA is working with firms to improve how they communicate with consumers and drive improvements in the effectiveness of the information consumers receive. The Smarter Consumer Communications initiative aims to bring about a change in the way information is both communicated and delivered to consumers
- the FCA may consider waiving or modifying disclosure rules where appropriate to facilitate testing of innovative communications
- working with government to bring digital currency exchanges into the scope of anti- money laundering regulation
- HM Treasury is working with the FCA to implement the revised Payment Services Directive (PSD2)
- FCA will work with HM Treasury to assess inhibitors to bringing digital identity to financial services. Those innovative firms which are bringing innovative eID solutions to the market can also access the Innovation Hub