FCA’s Nikhil Rathi: Automation increased license rejection rate to 20% from 7%
“We are always open to simplifying regulation whilst delivering the same outcomes and streamlining our processes without undermining rigour.”
Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA), revealed that one in five firms are now initially rejected for authorization, compared to one in 14 last year.
The significant progress comes on the heels of the FCA’s investment in automation, he explained in a speech delivered at the Lord Mayor’s City Banquet at Mansion House on the role of the financial watchdog in the context of the UK’s changing regulatory landscape.
With technology investment being hailed as a key factor behind the FCA’s improved efficiency during the last year, the agency’s CEO said there are plans to deploy expanded technology solutions going forward.
The FCA’s existing tech capabilities already allow it to test firms’ sanctions controls with big data techniques, scan around 100,000 websites a day to identify scams, and faster spot where to intervene and when thanks to a proprietary single view analytics tool.
The government agency will pursue the highest regulatory standards alongside embracing sector growth and competitiveness, so the UK can build on its reputation as a global leader that fosters innovation, the FCA chief executive said as he acknowledged work with the Bank of England, on the use of Artificial Intelligence in the regulatory framework, to examine benefits, risks and suggest solutions.
Henry Balani, Global Head of Industry and Regulatory Affairs for Encompass Corporation, commented: “Amidst a turbulent economy and a complicated geopolitical landscape, the UK faces uncertain and challenging times. It is essential that both businesses and the government remain committed to upholding the highest regulatory standards and encouraging innovation as a key component, in order to achieve as much stability and growth as possible – now and in the future.
“In recent months, the FCA has made strides when it comes to helping to improve the regulatory landscape and, ultimately, tackle financial crime, while also supporting businesses through extraordinary times. Despite this, there is still much to be done to further improve the regulatory framework and overall compliance in the UK. As we progress, we must continue to focus on not only regulatory oversight but also on fostering innovation and the use of the latest in technology to assist businesses when it comes to their own compliance processes as the landscape evolves.”
Nikhil Rathi, Chief Executive of the FCA, said: “We are always open to simplifying regulation whilst delivering the same outcomes and streamlining our processes without undermining rigour. As an independent regulator, we have shown we can act quickly, whether it was in our reaction to Covid, Russia, the rising cost of living and unprecedented market turbulence. It is vital that this independence and agility at speed is not undermined by any proposed call-in power. And while we embrace and embed a secondary mandate for growth, making it a primary mandate would clearly undermine our international standing.”
