Regulators Across the Globe Team-Up to Launch a Global Fintech Sandboxby Fintechnews Switzerland August 13, 2018
As one of the most regulated industries in the world, fintech companies face one big obstacle in scaling: expanding into different regions. Each nation not only comes with its own quirks and market conditions, it also comes with a strict set of regulations that could break your entire business upon entry.
Usually, the best way to expand is to anticipate a regulator’s response to your business and adapt it accordingly.
This is why the the UK’s Financial Conduct Authority (FCA) collaborated with regulators around the world to create an open network for innovative fintech firms to interact with regulators. Beyond just top-down interactions though, the hope is that the Global Financial Innovation Network (GFIN) becomes a framework for cooperation between distinct regulators as well on innovation-related topics, and for sharing different experiences and approaches.
Among some of the organisations that are already a part of GFIN include the Monetary Authority of Singapore, Australian Securities & Investments Commission, Abu Dhabi Global Markets, Hong Kong Monetary Authority, Consultative Group to Assist the Poor (CGAP), United States Bureau of Consumer Financial Protection, and a few others covering a whole plethora of regulators across the globe.
The Answer to Calls for a Global Fintech Sandbox
The GFIN is the result of the idea of a ‘global sandbox’ discussed in February 2018 which received 50 responses. A global sandbox could help reduce the time it takes to bring ideas to new international markets—as long as it’s transparent and fair to potential firms wishing to apply for cross-border testing.
Quite a few topics were highlighted in the feedback, like artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings (ICOs), know your customer (KYC) and anti-money laundering (AML).
Therefore, the FCA wants the GFIN to fulfill 3 main functions:
- Act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models;
- Provide a forum for joint policy work and discussions; and
- Provide firms with an environment in which to trial cross-border solutions.
Looking for Suggestions
While the consultancy has some lofty goals for the network, it is still in its very early stages. This is why FCA is looking for more opinions to help solidify a future mission statement for the GFIN, proposed functions, and where its priorities should lie.
The group is also keen to hear from other interested regulators or related organisations who wish to get involved.
Christopher Woolard, FCA Executive Director of Strategy and Competition and Board member commented:
“The establishment 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.”
Now, FCA is seeking more feedback which can be sent in until the 14th of October 2018.
Current plans will hopefully see FCA engaging with interested parties across different jurisdictions, and in Autumn, assess feedback to decide on their next steps.
The working group is asking for feedback on the consultation questions by 14 October 2018. Over the course of the next two months, the group will engage with interested parties across the different jurisdictions involved in the project. In the Autumn, the working group will assess feedback and agree on next steps.
Featured Image via Pixabay