Robo-adviceFeb 19 2018

Investment Association to assist members with fintech

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Investment Association to assist members with fintech

The Investment Association (IA) is launching an accelerator for fintech companies in the asset management industry, which it claimed should speed up the adoption of new technology across the sector.

The accelerator, called VeloCity, will get involved with two cohorts of four to eight Fintech firms per year.

Chris Cummings, chief executive of the Investment Association, said the solutions they will be working with will include artificial intelligence as well as distributed ledger technology, which is the technology behind cryptocurrencies.

Cloud-based infrastructure solutions and big data experts will also be involved in the accelerator.

Mr Cumminngs said the idea was to help these businesses develop solutions that are applicable to the asset management industry.

Mr Cummings said: "To remain globally competitive, the UK asset management industry must be restless in its quest for innovation and reinvention.

"Fintech firms are a key element in this process, driving innovation across the asset management industry to the benefit of investors, savers and pensioners. 

"The launch of VeloCity, the IA's new Fintech Accelerator, will act as catalyst in speeding up the take-up of new technology in the sector and ensure that Fintech firms are embedded into the asset management ecosystem."

John Glen, economic secretary to HM Treasury, said the government supports the initiative.

“The UK is a world leader in asset management, but to stay that way we have got to keep ahead of the curve.

"There are over 93,500 people employed in the UK's asset management sector, so the Fintech Accelerator - the first of its kind for the sector - will be fantastic news to them and to future entrepreneurs hoping to crack the market."

The selection of firms taking part in VeloCity will be via an application process that the IA described as "rigorous".

Successful firms will join for a fixed six month tenure, culminating in a demonstration day to industry representatives and stakeholders.  

The first VeloCity cohort will arrive in the second quarter of 2018.

Minesh Patel, managing director of London-based advisers EA Financial Solutions, said innovation in the sector would be welcome.

He said: "Fintech that could make asset management more transparent for both advisers and consumers would be particularly good."

The Investment Association's work comes after the FCA launched the Regulatory Sandbox in June 2016 as part of Project Innovate.

The City watchdog has so far seen 60 projects go through its doors.

Anna Wallace, head of innovation at the FCA, said the idea of the sandbox was to get in early with services that were trying something new in the market, with a limited test base and safeguards built in.

Ms Wallace said: "We see this as identifying the potential harm before it is widespread and being able to adapt our regulatory approach and give that feedback to a firm at a much earlier stage. The greatest trend has come from the start up community, who want to use the Regulatory Sandbox where they can work together with the regulator and understand how the regulation applies.

"The Regulatory Sandbox allows firms ways of working first before the launch of a service, with safeguards we think are appropriate. When the product goes live, we are not exactly sure how it might play out so we also work with the firm during the testing purely to spot any risks that might happen, and use our insight to see how these risks might be managed."