The Financial Conduct Authority (FCA) has joined financial regulators from around the world to create a new global network to boost fintech innovation.
The Global Finance Innovation Network (GFIN) will aim to provide a more efficient method for innovative fintech firms to interact with regulators.
The City watchdog has launched a consultation on the main functions for the GFIN. It proposes that the network will allow fintech firms to share experiences of innovation in different markets, providing a forum for joint policy work and providing firms with an environment to trial cross-border solutions.
This comes amid a business boom for fintech in the UK, after figures were released revealing that the British Isles had attracted more investment than any other country, accumulating $16.1bn. Four of Europe's top 10 fintech deals occurred in the UK, cementing the UK as a funding hot spot.
The network will also create a new framework for interactions between financial service regulators on innovation-related subjects, as well as helping fintech firms to navigate between countries as they search for new ideas.
Christopher Woolard, the FCA’s executive director of strategy and competition, said that creating the GFIN "is an important next step for organisations like ours who are actively engaged in understanding and harnessing the benefits of innovation in financial services for consumers, while managing the potential harm."
Woolard also said that the introduction of the GFIN "can help share the experiences and knowledge from across different markets, while also providing a platform for innovative firms wishing to scale their propositions via testing in multiple countries."
Today’s announcement provides the next steps of the project, following a consultation on the idea of a “global sandbox” in February 2018. Businesses and industry groups focused on regulatory co-operation, speed to market, governance and emerging technologies and business models in responses to the FCA.
Richard Hay, UK head of fintech at Linklaters, spoke approvingly of the “sandbox model”, saying that it "has proven effective in the UK at fostering shared learning between industry and the regulator. That the model is being replicated at global level is a testament to that effectiveness, and a sign of the growing importance of the sector.”