FinTech Industry & Regulation – Page 31 – FinTech and Blockchain Law Watch

UK grants FinTech a banking licence – another tier of regulation?

Aug 21 2016

Has the age of the digital bank arrived in the UK? Following the authorisation of Atom Bank last year, 3 additional digital banks have been issued with banking licences by the UK Prudential Regulation Authority (PRA) since May 2016.

These new licensees are the result of the PRA’s focus in recent years on lowering the barriers to entry for new banks and promote competition in the UK. As part of this focus, in 2013, PRA lowered the initial minimum capital requirements for Small Specialist Bank applicants to €1 million or £1 million (whichever is higher), plus a capital planning buffer (CPB). PRA and the Financial Conduct Authority (FCA) also launched a New Bank Start-up Unit in January 2016 to assist applicants with the authorisation process. Read More

A road map for UK FinTech standards

Aug 16 2016

By Jonathan Lawrence

New research has revealed the important role that standards could play in helping to strengthen and speed-up FinTech’s development in the United Kingdom. The research was published by the British Standards Institution (BSI), the national standards body of the UK. BSI produces technical standards on a wide range of products and services, and also supplies certification and standards-related services to businesses. The research was prepared by Finextra and gathered insights from a cross-section of FinTech companies, banks, trade associations, technology vendors.

BSI commissioned the research to investigate where standards could best support UK FinTech and help provide leadership in global standardisation following interest from the industry in 2015. This latest research shows there could be a further opportunity to complement regulation with standards, to promote the UK’s position in FinTech. The analysis found a number of priority areas where standards could help promote the streamlining of the procurement and onboarding processes between banks and FinTechs; integrating FinTechs into the standards and language of the financial services industry and providing consumer assurance and the gaining of trust.

To read the full report, please click here.

Strong response to ASIC sandbox proposal

Aug 12 2016

By Jim Bulling and Michelle Chasser

ASIC’s regulatory sandbox consultation has drawn a mixed response from around 30 businesses, industry and consumer groups which have made submissions. To refresh your memory about ASIC’s proposals check out our previous blog.

Tyro Payments was very supportive of the concept of a sandbox but had a few concerns about the proposed structure. Tyro’s main concern was the role of sponsors controlling start-ups’ access to the sandbox. It noted that Australia’s associations, hubs and accelerators were dependent on funding from industry incumbents and that exposing the sandbox to their influence is like “putting the fox in charge of the hen house”. Tyro was in favour of a UK style sandbox where applicants’ transitions into licensing are considered on a case by case basis by the regulator.

Impact of Brexit and UK FinTech

Jul 21 2016

by Jonathan Lawrence, Stephen Moller, Jacob Ghanty and Tom Wallace

A month has passed since the UK referendum vote to leave the European Union. Now that the initial dust is starting to settle, we have set out to examine various potential impacts on the UK FinTech sector. We consider areas including:

regulation and passporting
data protection and data sharing
anti-money laundering and know your customer
human capital
the role of banks
London as a global FinTech centre
venture capital

For our long form insight piece, please click here.

Monetary Authority of Singapore – Consultation on regulatory sandbox for FinTech solutions

Jun 23 2016

By Nicholas Hanna and Penelope Davey

In a move that is targeted at promoting Singapore as a leading FinTech hub in Asia-Pacific, the Monetary Authority of Singapore (MAS), the regulatory authority overseeing financial matters in Singapore, issued a consultation paper on 6 June 2016 which outlined a proposal for a “regulatory sandbox” for FinTech solutions.

The proposal will permit financial institutions and other entities to experiment with new FinTech solutions in an environment of relaxed regulation whilst maintaining appropriate safeguards. It is hoped that this proposed relaxed regulatory environment will allow such solutions to take root without being impeded by regulatory compliance costs and will improve the viability of innovations in the FinTech sector.

Regulatory sandbox and innovative regulation

Jun 09 2016

By Daniel Knight

Australian FinTechs are closer to getting a regulatory “sandbox” after the Australian Securities and Investments Commission (ASIC) released its detailed consultation paper this week. The paper details proposals for a testing ground for innovative robo-advice providers and other similar services. It also highlights ASIC’s views about some regulatory options already open to FinTechs under the current law, as we discussed in a previous post.

In a sign of ASIC’s engagement with this nascent sector, ASIC launched its proposals at a fintech startup founders event in Melbourne. ASIC emphasised it is seeking industry feedback and is open to making changes.

Gamification and financial services

Jun 07 2016

By Jim Bulling and Michelle Chasser

How would you use gamification to enhance the mobile and online experience for banking customers? That is the question Barclays Bank is asking developers during its Launchpad Business Challenge. Challenge applicants will have access to Barclays’ sandbox banking data and APIs to pitch their ideas. The Challenge will run for 3 weeks in June with successful applicants’ products being released on Barclays’ Launchpad platform for customers to explore and test.

Gamification involves applying game design elements and principles in non-game contexts and is used to improve user engagement and learning. A simple example of gamification is using a points based quiz to improve financial literacy.

This is not the first time that Barclays has experimented with gamification. In 2010 it released an interactive virtual city game in which players’ characters experienced the consequences of good and bad money management decisions.

Gamification is also a novel way to present important information to consumers in a way that is more approachable than traditional methods. In 2015 the Australian Securities and Investments Commission (ASIC) published a relief instrument which allows regulated disclosure documents such as Product Disclosure Documents and Financial Services Guides be disclosed in innovative ways. The accompanying good practice guidance issued by ASIC in Regulatory Guide 221 stated that disclosure documents can now incorporate a range of digital features including gamification.

Regulatory Guide 221 can be found here.

Brexit: the effect on UK FinTech

Jun 07 2016

By Jonathan Lawrence

On 23 June 2016, the United Kingdom will hold a referendum about whether to remain in or leave the European Union. A British exit from the EU has been labelled a “Brexit”.

A recent Financial News poll has showed that the UK FinTech sector is substantially in favour of staying. Financial News surveyed 118 FinTech professionals to gauge their opinion.

More than two-thirds said Brexit would be detrimental to UK FinTech. However, nearly 18% believe it is still unclear what the long-term impact would be. The remaining 13% think UK FinTech would benefit from a decision to leave the European Union.

Often tech talent is sourced from countries such as Bulgaria, Estonia, Hungary, Romania and Slovenia. The ability to access talent was a major concern of some business people interviewed. The other key potential issue is regulation. There’s a circular debate over whether there would be lighter regulation after the UK left the EU, or whether it would be forced to stay in line with the rest of Europe as a price for continued market access. One theory is that the European market – already smaller than the US – would, in effect, be divided in two. US FinTech firms already have the advantage of addressing a bigger market – partitioning Europe would make this advantage greater still.

More than 84% of those who said Brexit would harm UK FinTech said it would make London less attractive for foreign FinTech companies as a location for their European HQ. However, the largest share believes London would maintain its dominance as a FinTech hub. Asked which European cities would most threaten London, 28% answered “none”, closely followed by Berlin, 25%. Frankfurt came third with 15%.

On the other hand, some 13% said the sector would be better off and 18% were undecided. Of those who believe UK FinTech would benefit, 63% thought it would free up resources that could be reinvested in innovation. Some 58% said Brexit would make it easier for FinTech companies to do business with clients in non-EU countries.

New “FinTech Bridge” between UK and Singaporean FinTech companies and investors

May 17 2016

By Jonathan Lawrence

The UK Government has announced a new “FinTech Bridge” to help UK FinTech firms and investors access the Asian market and expand to Singapore, as well as attracting Singaporean FinTech companies and investors to the UK.

The launch on 11 May 2016 included the signing of a regulatory cooperation agreement between the Financial Conduct Authority (“FCA”) and the Monetary Authority of Singapore (“MAS”). The agreement will enable the regulators to refer FinTech firms to their counterparts across the globe. It also sets out how the regulators plan to share and use information on financial services innovation in their respective markets.

ASIC update on fintech regulatory sandbox proposal

May 09 2016

By Jim Bulling and Jack Fraser

ASIC has put out a media release on the proposed regulatory sandbox licensing exemption and will release a public consultation paper on the proposal in June of this year. The purpose of the sandbox is to foster innovation in the FinTech industry by allowing eligible businesses to test their products in the market without initially being subject to the usual regulatory mechanisms and requirements.

ASIC Commissioner John Price said that this “consultation paper will seek feedback on additional steps that ASIC may take to facilitate fintech innovation while maintaining protections to ensure investor and consumer trust and confidence”.

Category:FinTech Industry & Regulation