The Financial Conduct Authority has revealed it is using technology to help combat phoenixing.
Speaking at the Personal Investment Management & Financial Advice Association (Pimfa) fintech conference today (12 September), Nick Cook, the regulator's head of regtech and advanced analytics, said the FCA was able to use analytics to help it spot when a firm might be a phoenix.
This involves analysing data to spot trends and patterns, plus hopefully identifying where a firm is resurfacing with a different identity.
Phoenixing is when a firm in the financial services sector closes down to avoid its liabilities, but a new firm is launched involving the same people.
Mr Cook said: "Phoenixing is a long standing issue. It is quite hard to pick up these individuals because they will often give us a different date of birth or different information.
"So we are looking at how we can use network analytics to spot people we wouldn't have known to spot before."
Mr Cook said the FCA is also using a similar method to identify scams and fraud, as well as misconduct.
He said: "It allows us to look at who is promoting what on the web. Who is offering rates on certain products which don't look in line with market norms, for example.
"You cannot do this through human effort, with an army of people querying Google every day. It would take forever."
Mr Cook said the FCA was also looking into the potential of chatbots - automated services which answer questions and "chat" to people based on artificial intelligence - to help regulated firms and individuals meet and understand the rules.
For example he said the regulator was looking into the creation of a chatbot that would sit over the FCA handbook, which people could submit questions about regulation to.
damian.fantato@ft.com
