Barclays is developing a regtech tool, which tracks regulation updates from the FCA Handbook and ‘aligns their implementation’ to internal policy and Nationwide is developing an automated savings and investment advice software.
Curl, a payments software operating around an open banking-driven API is another tool selected from 61 applicants to test its products in a safe space with live consumers and built-in safeguards, regulatory consultation and supervision and potentially easier access to finance.
The FCA is inviting the next and fourth wave of regulated and unregulated applicants with a clear objective, for example, to reduce costs for consumers, to apply before the 31 January 2018.
The sandbox – a first for regulators worldwide – is part of Innovate, an initiative kicked off in 2014 to promote competition in the interest of consumers.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “Since we first opened the sandbox, it has supported almost 70 firms in testing innovative new products and services. It is particularly encouraging that we are now seeing more applicants from outside London and a broader range of firms testing in the sandbox.”
Other software tools include Blockchain-based payment services, general insurance, Anti-Money Laundering controls, biometric digital ID and Know Your Customer (KYC) verification.
For example, Chynge is a cross-border money remittance system that incorporates a transaction monitoring system which is powered by a virtual, artificial-intelligence compliance bot which aims to tackle money laundering, terrorism financing, and fraud more efficiently.
First Direct and Bud are working on an app which learns customer behaviour from transactional and demographic data to identify product needs from HSBC and external information sources. Other innovators include a tool called Solidi, which is a blockchain-based payments platform that harnesses cryptocurrencies to move money faster and more cheaply and another tool, Wrisk, is a usage-based contents insurance product with ‘innovative’ risk-scoring.
The regulator published a series of findings from its first three sandbox groups in October and Experian, which was in the second cohort, is still testing a mortgage eligibility tool it developed and launched in September this year.
The tool, which sits on credit reference agency Experian’s website, aims to speed up and simplify a consumer’s application process by offering a research tool at the information-gathering stage and signposts the borrower on to seek advice from intermediaries. The pilot includes six lenders: Barclays, Aldermore, Family BS, West Brom, Leeds BS and Platform.
The function will help people find out which mortgages they are likely to be accepted for and how much they could borrow, based on the limited pool of lenders’ criteria.
Experian confirmed it had no firm plans for the tool during the pilot phase.