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FCA wants financial innovators to ‘flourish’ – Wheatley

by: Samantha Partington
  • 17/10/2014
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FCA wants financial innovators to ‘flourish’ – Wheatley
Firms must be given enough space to 'innovate and flourish' and not be weighed down by restrictive regulation said Martin Wheatley, chief executive of the Financial Conduct Authority (FCA).

In his speech, delivered last night at Mansion House, London, Wheatley addressed the challenges of providing consumer protection while creating a market which was able to keep provide creative products and services. 

“In the aftermath of the financial crisis we saw competition in many financial markets lessen as concentration increased,” said Wheatley.

“Today, the outlook is different. We see new entrants joining the market, or poised to join. We see new models shake up established markets – peer-to-peer being only the most fashionable.

“Our reaction to these developments will be one of the defining characteristics of the FCA, helping to shape a market that offers consumers alternatives, products that meet their needs, delivered in a way that fits with how they live.”

Wheatley said that while close supervison would always be required for large financial institutions, because of the damaging impact they can have, smaller firms did not require the same level of scrutiny.

But he added that this freedom can often create an isolating effect.

“The closeness of that supervision [of large institutions] means that if any of these companies has a question for us they know who to call, assured they’ll get an answer quickly.

“To the app developer working alone who to call is not as obvious. And the answer won’t come so quick.”

To tackle the problem the regulator will set up an ‘innovation hub’ and ‘incubator’ so firms which have fresh ideas can access the FCA’s expertise to better understand the pitfalls and opportunities of their proposals.

Payday lenders were highlighted as clever innovators in the way they have managed to catch conumers attention by using simple language and instant online access to lending.

“We’ve committed to opening our doors to those – regulated and not – who come with new ideas about how to deliver financial services,” said Wheatley.

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