The Financial Conduct Authority (FCA) has established a partnership with financial regulators from across the globe to establish a new global network that aims to boost the innovation of fintech.
The Global Finance Innovation Network (GFIN) will strive to offer a more efficient method for innovative fintech companies to interact with regulators.
The City watchdog has initiated a consultation regarding the main functions for the GFIN. It suggests that the network will enable fintech companies to share experiences of innovation in various markets, establishing a forum for joint policy work and giving the companies with an environment to test out cross-border solutions.
The announcement arrives amid a business growth for fintech in the United Kingdom after figures that were released revealed that the British Isles was able to attract more investment as compared to any other country after it accumulated $16.1 billion. Four of out of the top 10 fintech deals in Europe occurred in the United Kingdom, establishing the United Kingdom as a funding hot spot.
The said network will also introduce a new framework for interactions between financial service regulators regarding subjects that are related to innovation, as well as helping fintech companies to navigate between nations as they look for new concepts and ideas.
The executive director of strategy and competition of the FCA, Christopher Woolard, stated that establishing the GFIN “is an important next step for organisations like ours who are actively engaged in understanding and harnessing the benefits of innovation in financial services for consumers while managing the potential harm.”
He also disclosed that the introduction of the GFIN “can help share the experiences and knowledge from across different markets, while also providing a platform for innovative firms wishing to scale their propositions via testing in multiple countries.”
The announcement presents the next steps of the said project, after a consultation regarding the idea of a “global sandbox” last February 2018. Various businesses and industry groups concentrated on speed to market, regulatory co-operation, business models, and governance and emerging technologies as a response to the FCA.
The UK head of fintech at Linklaters, Richard Hay expressed his support for the “sandbox model.” He said that it “has proven effective in the UK at fostering shared learning between industry and the regulator. That the model is being replicated at global level is a testament to that effectiveness, and a sign of the growing importance of the sector.”