FCA says regulation must stay ahead on tech

FCA says regulation must stay ahead on tech

Rapid changes to how technology is used by financial services must be met with nimble regulation, the FCA director of policy has said, ahead of the launch of the regulator’s dedicated automated advice unit next month.

Speaking at the Westminster Business Forum conference in London today (26 April) David Geale said: “The proliferation of technology is changing the financial services market and is changing it at quite some pace.

“It is important that as a regulator we keep on top of that and keep abreast of it.”

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Tech-led innovation has been a focus at the Financial Conduct Authority for some time.

In a speech in 2014, former FCA chief executive Martin Wheatley said the question was “where are the technologies that are benefitting consumers and markets – and how do you then support them?”

Today (26 April) Mr Geale told delegates there are “opportunities for all of us to engage consumers in a different way”, and pointed to the need to overhaul often long and complex client information documents.

“Behavioural economics tells us people don’t read policy documents and it is important the key messages are very clear and technology gives us an opportunity there.”

In October 2014 the FCA launched Project Innovate to help fintech firms launch in the industry.

Mr Geale said since then the regulator has been approached by more than 500 firms and it has helped more than 200 make better use of technology.

He added the regulator’s ‘sandbox’ initiative, which would allow some innovative businesses to test their services in a protected environment, would be launched in the coming months.

A new ‘Advice Unit’ within the FCA focusing on the development of automated or ‘robo-advice will be open for business from May, the regulator announced this month.

Mr Geale said the aim of the unit is “looking at whether there are ways to open up the advice market to consumers”.

“Many of them don’t feel they need advice and there might be a limited set of services available to them.”

He added the FCA would shortly be publishing its latest work on the cash savings market, to find out whether more could be done to encourage switching between savings accounts.