Essay Writers

You will need to obtain permission from the copyright holders concerned where we have identified any third party copyright information.

Background

The federal government announced with its Productivity Plan 2015 that departments will be expected to work with regulators to create innovation plans by spring 2016. This announcement reflects the main element government try to ensure the UK is supporting the development of home based business models and disruptive technologies, breaking down barriers to entry and productivity that is boosting. To do this the UK’s regulation and enforcement frameworks needs to be agile enough to respond flexibly to continuing developments in new technologies and business that is disruptive.

The objective of this consultation is always to put down ongoing and work that is proposed foster a supportive regulatory framework for financial services that allows innovation to flourish.

The innovation plan covers the work associated with services that are financial: Financial Conduct Authority (FCA ), Payment Systems Regulator (PSR ), Prudential Regulation Authority (PRA ) and the wider Bank of England.

The innovation plan covers three issues that are key

• How new technology is shaping financial services
• How financial services regulators are adapting to new technologies and business that is disruptive to encourage growth
• How services that are financial are better utilising new technologies to come up with efficiency savings and lower burdens on business

This consultation invites comment on the job of financial services regulators to guide technology that is innovative disruptive business models. We might also choose to understand where there could be gaps in regulatory approach in terms of supporting innovation.

Draft innovation policy for financial services

2.1 Innovation and regulation

The vision that is government’s for UK financial services to function as the most competitive and innovative in the world, delivering greater choice and value for consumers.

The us government has already taken significant action to reach this vision. This includes:

Creating the best regulatory environment is particularly important to make certain that innovative firms can compete and grow. To this end, HM Treasury has firmly embedded competition and innovation objectives when you look at the regulatory landscape for financial services through the main regulators’ objectives and remits.

2.2 How technology that is new shaping financial services

An integral focus of innovation in financial services in modern times is the development of fintech – technology solutions which deliver financial services, often in a far more efficient and customer-focused way. For instance, technology has enabled:

• consumers to make payments via their smartphones
• the matching of consumers and businesses with money to truly save and invest with those who need certainly to borrow
• personal insurance pricing on the basis of the characteristics and behaviours of individual consumers
• the development of new digital currencies

The services that are financial is characterised by both new disruptive players and fintechs using the services of incumbents to supply more innovative services and products through existing networks and infrastructure.

The fintech sector is diverse: from small dynamic start-ups to more established players. Fintechs operate in many regions of financial services – as an example, payments, peer-to-peer lending, big data analytics and robo-advice – while the potential for technology to transform financial services is substantial. 25% of all fintechs globally come in the payments that are retail 1 .

The UK may be the world-leader in fintech. An report that is independent Ernst and Young (EY) published in February ranked great britain whilst the leading fintech centre in the world – ahead of other leading hubs like Silicon Valley, New York and Hong Kong.

The UK’s fintech sector has been rap >2 that is growing .

2.3 How financial services regulators are adapting to new technologies and disruptive business models to encourage growth

This section outlines how each financial services regulator intends to support and promote innovation, facilitating the introduction of new technologies and disruptive business models in financial services.

The government’s priority is always to make certain that regulation is proportionate and promotes innovation, as opposed to constrains or inhibits it. Indeed you can find apt to be some regions of existing regulation, developed well before digital and advances that are technological that may now be acting as a barrier to innovation.

2.4 Financial Conduct Authority (FCA )

Project Innovate

It helps innovative firms get access to fast and frank feedback on the regulatory implications of their concepts, plans and choices. In addition seeks to tackle the structural conditions that impede the progress of innovators going into the market.

Part of Project Innovate may be the Innovation Hub that will help new and businesses that are establishedboth regulated and non-regulated) introduce innovative financial products and services to your market. The Innovation Hub also identifies places where the framework that is regulatory to adapt to enable further innovation when you look at the interests of consumers.

To date, Project Innovate has helped over 250 firms, 18 of which were authorised to undertake regulated activities. It offers an end-to-end experience for new entrants. Firms that receive initial support through the Innovation Hub have their applications for authorisation handled via a specialised Project authorisation process that is innovate.

• dealing with government on its plans to introduce anti-money laundering regulation for digital currency exchanges, to present a supportive environment for legitimate digital currency users and businesses, and create a hostile environment for illicit users
• making a statement studying the extent of the dilemma of disproportionate de-risking, which denies businesses access to banking facilities, and just how the FCA might influence firms to take a far more approach that is proportionate
• using informal steers on proposed innovations to allow more communication that is direct firms

The UK attracts fintech innovators from around the planet – many choose to base themselves within the UK, not only to engage in a captivating local ecosystem, but additionally because they start to see the UK as a springboard to launch their businesses or products internationally and bolster their competitiveness.

The FCA as part of this work

• Helps put UK-based innovators in touch with just the right regulators once they turn to start business that is doing other regulatory jurisdictions
• Stand prepared to help innovators that are non-UK writing paper for college students in going into the UK market
• Seeks co-operation agreements with key regulators. For instance, the FCA recently signed a world-first Co-operation Agreement with all the Australian regulator, ASIC, to facilitate the referral of innovative firms between their respective innovation hubs
• Promotes pro-innovation regulatory approaches to international standard-setters

Other initiatives to aid innovation and competition

The guidance is designed to dispel misconceptions about regulators’ opposition towards the cloud and encourage innovation in this region.

It is designed to encourage greater utilization of technology and behavioural insights to supply communications which help people make effective decisions about products and services. The FCA is devoted to using the services of industry where an idea has strong potential to improve consumer outcomes; the FCA may consider waiving or modifying disclosure rules where appropriate to facilitate this testing.

It is also looking at amending its Handbook to get rid of an amount of disclosure requirements that have not been as effective as initially envisaged with regards to providing information that is appropriate consumers.

2.5 Payment Systems Regulator (PSR )

Access to payment systems is an important driver of competition and innovation when you look at the provision of payment services. Limited access has long been considered a barrier to entry for new banks, e-money issuers and other payments institutions, aided by the concern that the pace of innovation in this certain area is too slow.

A objective that is main to operate proactively with small payments institutions and fintech firms to determine where the barriers to innovation exist, which feeds to the PSR ’s policy development and implementation.

Competitive innovation

This includes publishing reports that are annual assess each scheme’s compliance, which includes areas where the PSR expects to see improvements. The PSR will consider further action that is regulatory improvements are not made.

The PSR is conducting two market reviews to ensure that the market is operating in a way that supports competitive innovation

The findings that are interim both reviews were published in February and March before the final reports later this season. Dependent on its findings, the PSR may implement remedies or undertake further policy strive to support competitive innovation.

Collaborative innovation

Following engagement with the wider payments community, the Forum developed its set that is initial of areas. This consists of:

• Greater control and assurance for end users
• Simplifying usage of market for payment services providers
• An evaluation of how industry could work to detect and reduce crime that is financial
• An assessment for the costs and advantages of account number portability