Martin Wheatley, chief executive of the Financial Conduct Authority, has pledged to shift the focus of the regulator away from a concentration on larger firms including big banks and institutions to support innovative smaller firms and start-ups.
Speaking yesterday (28 October) at the FinTech conference in London, Mr Wheatley said that the FCA needs “a different approach”.
Mr Wheatley said that innovation in the industry had moved beyond the innovation that was creating ever more complex structured products “to innovation that is transforming the lives of individuals”.
However, he acknowledged a traditional focus on the largest firms with the widest influence had left smaller firms unable to cope with a compliance burden that can stifle progress.
Mr Wheatley said: “We’ve seen a profliferation of new technology for making payments so there’s a wave of innovation in financial services that is taking place right now... small start-up organisations, many fell outside of the regulated financial sector.
“Traditionally regulators ourselves have focused on the biggest players - traditionally we’ve focussed on the big banks, the big insurers the big asset managers - because frankly they are the firms that have the biggest impact in the industry and when it goes wrong, the biggest detriment.
“But we realised that if we need to support the likes of innovators, entrepreneurs in the industry we’ve got to change our focus. We need a different approach and small start ups can’t afford the army of compliance people that large banks can.”
Mr Wheatley lamented that technological innovation was not yet happening in the way it is for some other industries, citing disruptive change and digitisation in the newspaper industry, or telecoms and retail, but he said this was “starting to get there” and is “changing fast”.
“For the last few years we have seen mobile banking gain significant traction... last year over a quarter of people using bank accounts check their balances on their mobiles, clearly a very, very strong trend.”
ruth.gillbe@ft.com
