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FCA finds biggest number of innovators in retail and investment sectors

FCA finds biggest number of innovators in retail and investment sectors

Data by the Financial Conduct Authority has shown the largest number of innovators using its regulatory sandbox come from the retail banking and payments, investment and retail lending sectors.

As part of its market insights on the firms supported by FCA regulatory sandbox and innovation pathways, the regulator revealed it had received over 2,400 applications.

Since its launch in 2014, the FCA said its innovation hub has supported a diverse range of firms, from incumbents to fintech start-ups, allowing firms to test innovative products or services in a live market through the regulatory sandbox or helping firms resolve regulatory questions through innovation pathways.

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Until the end of 2022, it supported 867 firms, including 168 firms and products accepted for testing in the regulatory sandbox.

The FCA said through the support it has provided, it has collected data and valuable insights into the rapidly developing UK fintech market. 

“This gives us a deeper understanding of how new technology is being used, informs our policy, and helps us understand the barriers to access faced by new business models," it said. 

“The data provides a picture of the firms supported between 2014 and 2022. While we classify technologies and areas of innovation based on existing observations, we welcome applications from new areas that are not covered in the charts.”

The ‘cross-sectors and others’ category refers to products or services that are not specific to one sector, such as software or regtech solutions for financial services providers.

The FCA said in 2022 the common innovations it supported within innovation pathways included:

  • Open banking use cases in robo-advice and data infrastructure areas.
  • Blockchain use cases within the payment and wholesale markets sectors.
  • Process innovation, InsurTech and embedded finance propositions.

“Given our focus on the automated advice area following the publication of the Financial Advice Market Review, the mainstream use cases involve automated advice or guidance models developed within investment, insurance, mortgage, and debt-counselling sectors,” the FCA said.


The FCA data recognised London is a globally known hub for fintech, but innovative businesses in the UK are not limited to London. 

It found that most regulatory sandbox and innovation pathways firms are based in the UK, with 65 per cent of regulatory sandbox and 54 per cent of innovation pathways firms based in London.  

“While our remit lies within the UK financial services industry, we also support international firms wanting to expand into the UK,” the FCA said.

“We have been actively engaging with UK regional firms and industry associations to increase awareness of our services and we encourage applications from areas including Wales, Scotland, Northern Ireland and British Overseas Territories.”

For UK and international firms looking to expand to multiple jurisdictions, the FCA said it offers the Global Financial Innovation Network where innovative firms can engage with regulators across countries and trial cross-border solutions.

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