28 October 2014

FCA: Innovation - the regulatory opportunity

Chief Executive of FCA: "We have identified some priority areas that we want to tackle. The most cross-cutting, immediate problem facing a range of innovators is a basic one; getting a bank account."

Martin Wheatley, Chief Executive of the Financial Conduct Authority, delivered a speech at the Financial News Conference in London.

“We will not interfere with legitimate commercial decisions by banks. But we are serious about supporting innovators. So we are thinking creatively about how we might be able to help. We know that this is a pressing issue, so we will keep you updated on progress.

Next up, regulatory uncertainty. This creates particular problems for innovators. Disruptive innovation, of the Clayton Christensen variety, upsets the status quo. This is a challenge for other players. It is also a challenge for the rules of the game. It means that an innovator might get conflicting interpretations from different lawyers. And talking to one lawyer is expensive enough. We hope to tackle this through the work of the Innovation Hub itself. By giving informal steers to innovators to provide clarity, or if needed, by adapting our rules to bring them up-to-date.

A specific example was raised over the summer, regulatory uncertainty in relation to digital currencies. In August, the Chancellor of the Exchequer announced a major programme of work looking into this area. We are actively engaging with the Treasury on this. We want to understand what role regulation should play. We are also interested in exploring possible benefits from block-chain technology. How it might be used elsewhere in financial services.

Finally, one issue raised is very much in our own hands. We were asked to modernise, move away from paper-based processes, improve the content on our website and make it easier to use. Problems with the website especially affect small innovators. It is their main source of information about regulation.

Full speech

© FCA - Financial Conduct Authority