FCA says regulatory sandbox growing in popularity as second cohort is unveiled
The Financial Conduct Authority has selected 31 firms for its second cohort of regulatory sandbox participants, narrowing down the field from an initial list of 77 submissions. The range of firms testing in the second cohort is diverse, covering a variety of geographies and sectors including wholesale, general insurance, payments, retail banking and retail lending.
Accepted propositions from firms cover a range of ideas including distributed ledger technology-based payment services and artificial intelligence software to observe client behaviour and better determine client preferences before financial advice is given.
Christopher Woolard, executive director of strategy and competition at the FCA, says: “The sandbox continues to grow in popularity and it is particularly encouraging that both the number of firms applying and accepted for testing has increased in cohort two. That means more innovative firms, trialling more innovative propositions to bring to the market. This is an important part of the FCA’s commitment to promoting innovation and competition in the markets we regulate.”
In the sandbox’s first phase, 24 firms were accepted out of 69 applications and 18 firms had testing plans approved in October 2016.
With the window closing on the second cohort, the FCA is inviting applications to participate in its third phase, which will commence testing in November 2017.