Deadline for next wave of FCA’s fintech sandbox applications draws closer
The UK regulator awaits the applications from potential participants in the second cohort of its technology startup accelerator program.
The UK Financial Conduct Authority (FCA) reminds firms that they may apply for the second cohort of its regulatory sandbox until January 19, 2017.
FCA’s case officers will be taking calls from applicants between 12-4pm on January 18, 2017 and 10am-1pm on January 19, 2017 to provide more information.
Those willing to participate in the sandbox, which is in its essence a technology startup accelerator with a focus on tech regulation, have to consider several matters before applying. For instance, the applicants should have substantial UK nexus and have to make sure that their product is indeed innovative. The FCA stresses that firms must consider specific testing objectives and a testing plan and whether the idea can be tested in a live environment.
The recommendations that the FCA makes for the second cohort are based on its experience with the first cohort.
The first cohort saw the FCA receive a total of 69 applications, of which 24 applications were approved for development towards testing, including start-ups, challengers and incumbent firms.
The list includes big banks like HSBC and Lloyds Banking Group. HSBC is working in partnership with Pariti Technologies, a FinTech start-up, on an application to help customers improve management of their finances. Lloyds Banking Group is developing an approach seeking to enhance the experience for branch customers which is aligned with the online and over the phone experience.
The first cohort also includes a number of participants working in the digital currencies (blockchain technology). BitX, for example, develops a cross-border money transfer service powered by blockchain technology, whereas Tramonex is testing an e-money platform based on distributed ledger technology that aims to facilitate the use of “smart contracts” to transfer donations to a charity.
Back in the spring of 2016, when the FCA sandbox was launched, FinanceFeeds reiterated the importance of such an approach towards regulation. In case this experiment is successful, it would signify a shift towards a new collaboration-focused regulation of fintech firms.