The FCA and the BoE are taking the “first steps” to automating regulation, chancellor Philip Hammond announced in a speech at the second International Fintech Conference.
In conjunction with several banks, the FCA is looking to start using new reporting technology in two areas of regulation within the next six to nine months, according to the Fintech sector strategy report which accompanied Hammond’s speech.
The report said that automating compliance – such as by making regulations machine readable – could reduce costs, improve accuracy, and allow quicker implementation of new rules – as well as removing a “key barrier” for nascent fintechs as they enter the market.
The report also announced that the FCA is working with BoE on the next Prudential Regulation Authority (PRA) rulebook on how to define and implement machine readable rules.
Additionally, a call for input was published this February by the FCA to ask how these ideas could be developed further, with findings to be announced in Summer 2018.
As a part of the government’s fintech sector strategy, Hammond announced that envoys will be appointed across the UK to promote fintech adoption by regional banks and building societies.
Efforts by envoys to promote fintech are already taking place in Scotland, and further envoys will be appointed for the remainder of the UK, with HM Treasury saying in the report that the benefits of fintech must be “felt nationwide”.
Meanwhile David Duffy, chief executive officer of Clydesdale and Yorkshire Banking Group, has already been appointed new English envoy to promote fintech adoption.
Furthermore, the chancellor said that a new code of industry standards will be erected to ease fintech partnerships with established financial providers.
Sponsored by Barclays, Lloyds, HSBC, RBS, and Santander, a Fintech Delivery Panel is developing a set of industry standards detailing what financial services firms will need from fintech firms before entering into partnerships.
The standards are expected by the end of 2019, and the sponsoring banks committed to implementing them.