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In the beginning…

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Launched in October 2014.

Aim is to encourage innovation in the interests of consumers.

Innovation can be apowerful driver of effective competition in the interests of consumers.

Helps FCA keep pace with market developments, understand possible benefits and risks to consumers.

Encourage innovation

in the interests of consumers

Better risk management

Better value for money

Greater inclusion

More efficient

value chain

Better user experience

Project Innovate - 23 months old

608 Requests for

support

42 Firms authorised

or awaiting authorisation

decision

312 Firms supported

76% Rated overall

experience as good or excellent

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Supervision

End-to-end service

AuthorisationsInnovation Hub

Ad-hoc inputs

Deliverables

• Authorisations - Shorter period awaiting authorisation and thus encourages competition.

• Supervision – FCA can monitor any risks perceived during authorisation. Helps us identify whether the innovation is in the interests of consumers.

End-to-end

process

A seamless transition between FCA departments for new market entrants.

RegTech

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Objective:• To encourage technological innovation that improves compliance while

reducing the cost of regulation

Our work to date: • Call for Input in November 2015, followed by a surgery and roundtables• TechSprint in April 2016 to find solutions to some of the issues affecting

consumer access to financial services.• TechSprint in November 2016 addressing ‘Unlocking Regulatory

Reporting’ where technology directly impacts the interface between the regulator and the regulated.

Our international engagement

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Our international engagement approach is to:• Facilitate the entry of innovative overseas firms into the UK• Facilitate the expansion of innovative UK firms overseas• Promote pro-innovation regulation to international standard-setting

bodies

The FCA has signed a Co-operation Agreements with a number of other regulators including: • Australia (ASIC’s Innovation Hub and plans for sandbox)• Singapore (MAS’ Financial Technology and Innovation Group and plans for

sandbox)• Korea (Korean Financial Services Commission (FSC))

Regulatory sandbox

Regulatory sandbox - safe space for businesses to test out innovative ideas with real people

Objectives:• Reduced time-to-market at potentially lower cost• Better access to finance• More innovative products reaching the market• Appropriate consumer protection safeguards built in to

new products and services

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Regulatory sandbox – options

Unauthorised firms• Barrier to testing: unauthorised firms

providing financial services• Sandbox option: restricted authorisation

All firms• Barrier to testing: concern regarding FCA

reaction to new solutions• Sandbox options:

─ No enforcement action letters─ Individual Guidance─ Waivers

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Customer protection

•Direct or indirect benefit to consumers

•Appropriate testing parameters and customer safeguards when testing

•Fair exit strategy for customers

Three elements of protection:

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Firm journey

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Sandbox CriteriaFirm in scope / Genuine innovation / Consumer benefit / Need for sandbox / Readiness to test

Closing remarks

• Technology offers transformative opportunities for financial services

• Can help ensure evolving consumer needs are met

• FCA supports innovation that advances our objectives and benefits consumers

• FCA Innovation Hub and supporting initiatives established in response

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