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The federal government announced in its Productivity Plan 2015 that departments may be required to make use of regulators to write innovation plans by spring 2016. This announcement reflects the important thing government aim to make sure the UK is giving support to the growth of start up business models and disruptive technologies, breaking down barriers to entry and boosting productivity. To achieve this the UK’s regulation and enforcement frameworks should be agile adequate to respond flexibly to continuing developments in new technologies and disruptive business models.
The goal of this consultation is always to lay out ongoing and work that is proposed foster a supportive regulatory framework for financial services that allows innovation to flourish.
The innovation plan covers the task associated with the financial services regulators: Financial Conduct Authority (FCA ), Payment Systems Regulator (PSR ), Prudential Regulation Authority (PRA ) plus the wider Bank of England.
The innovation plan covers three key issues:
This consultation invites touch upon the task of financial services regulators to guide technology that is innovative disruptive business models. We would also choose to understand where there might be gaps in regulatory approach with regards to innovation that is supporting.
The government’s vision is for UK financial services to function as most competitive and innovative on the planet, delivering greater choice and value for consumers.
The us government has already taken action that is significant reach this vision. This can include:
Creating the right environment that is regulatory particularly vital that you make sure innovative firms can compete and grow. For this end, HM Treasury has firmly embedded competition and innovation objectives within the landscape that is regulatory financial services through the key regulators’ objectives and remits.
A key focus of innovation in financial services in the past few years is the development of fintech – technology solutions which deliver financial services, often in a far more efficient and customer-focused way. For instance, technology has enabled:
The financial services sector is characterised by both new disruptive players and fintechs using the services of incumbents to supply more innovative services and products through existing networks and infrastructure.
The fintech sector is diverse: from small dynamic start-ups to more established players. Fintechs operate in lots of regions of financial services – as an example, payments, peer-to-peer lending, big data analytics and robo-advice – as well as the potential for technology to change financial services is substantial. 25% of all fintechs globally are in the payments that are retail 1 .
The united kingdom is the world-leader in fintech. An report that is independent Ernst and Young (EY) published in February ranked the UK since the leading fintech centre on the planet – ahead of other leading hubs like Silicon Valley, New York and Hong Kong.
The UK’s fintech sector has been growing rap >2 .
This section outlines how each financial services regulator plans to support and promote innovation, facilitating the development of new technologies and business that is disruptive in financial services.
The government’s priority is always to make sure that regulation is proportionate and promotes innovation, in the place of constrains or inhibits it. Indeed you can find probably be some regions of existing regulation, developed long before digital and technological advances, which might now be acting as a barrier to innovation.
It can help innovative firms get access to fast and frank feedback on the regulatory implications of the concepts, plans and choices. It seeks to tackle the structural conditions that impede the progress of innovators entering the market.
Element of Project Innovate is the Innovation paper writer Hub that will help new and businesses that are establishedboth regulated and non-regulated) introduce innovative lending options and services to your market. The Innovation Hub also identifies areas where the framework that is regulatory to conform to enable further innovation when you look at the interests of consumers.
Up to now, Project Innovate has helped over 250 firms, 18 of which have been authorised to undertake regulated activities. It offers an end-to-end experience for new entrants. Firms that receive initial support from the Innovation Hub have their applications for authorisation handled via a specialised Project Innovate authorisation process.
Great britain attracts fintech innovators from about the planet – many choose to base themselves when you look at the UK, not just to be part of an exciting local ecosystem, but also since they begin to see the UK as a springboard to launch their businesses or products internationally and bolster their competitiveness.
The FCA as part of this work
The guidance is designed to dispel misconceptions about regulators’ opposition to your encourage and cloud innovation in this region.
It aims to encourage greater use of technology and behavioural insights to provide communications that help people make effective decisions about products and services. The FCA is invested in dealing with industry where an idea has strong potential to improve consumer outcomes; the FCA may consider waiving or disclosure that is modifying where appropriate to facilitate this testing.
It is also looking at amending its Handbook to remove a wide range of disclosure requirements which have not been as potent as initially envisaged with regards to providing information that is appropriate consumers.
Access to payment systems is an important driver of competition and innovation into the provision of payment services. Limited access is definitely considered a barrier to entry for new banks, e-money issuers as well as other payments institutions, aided by the concern that the pace of innovation in this certain area is simply too slow.
A objective that is main to get results proactively with small payments institutions and fintech firms to identify in which the barriers to innovation exist, which feeds to the PSR ’s policy development and implementation.
This consists of publishing reports that are annual assess each scheme’s compliance, which includes areas where the PSR expects to see improvements. The PSR will consider further regulatory action if improvements are not made.
To ensure the market is operating in a manner that supports competitive innovation, the PSR is conducting two market reviews:
The interim findings for both reviews were published in February and March before the final reports later in 2010. Depending on its findings, the PSR may implement remedies or undertake further policy work to support innovation that is competitive.
Following engagement because of the wider payments community, the Forum developed its initial set of priority areas. This consists of: