The U.K. Financial Conduct Authority (FCA) on Monday unveiled the list of firms that have been selected to participate in testing through its regulatory sandbox for financial technology (fintech) firms.
The concept allows firms to experiment with novel products, services, or business models in a limited testing environment with certain regulatory relief. The FCA received applications from 69 firms and 24 of them have been approved to engage in testing, including start-ups and existing firms.
The testing will begin shortly, the FCA says, and the regulator has set out agreed upon testing parameters, including consumer safeguards. The list includes: firms that are experimenting with distributed ledger technology for payments; automated insurance claims; a semi-automated advice tool for debt; and, a digital identity firm.
Among the established firms that are participating, HSBC will be testing a personal finance app, and Lloyds Banking Group will examine a new approach to improve the branch experience that is aligned with its online and phone services.
“The FCA’s regulatory sandbox was a first for regulators worldwide and underlines our deep commitment to innovation and our willingness to think outside the usual regulatory parameters,” says Christopher Woolard, executive director of strategy and competition, FCA.
“It has been an intense process for both firms and ourselves and we are grateful for their cooperation and hard work in getting us all to this position. We look forward to these businesses bringing new products and services to market whilst we ensure that appropriate consumer protection safeguards are in place,” he adds.
Firms can apply to be part of the second sandbox cohort at the FCA, starting Nov. 21 through Jan. 19, 2017. Testing for these firms is expected to begin in May 2017.
Last month, the Ontario Securities Commission (OSC) announced its own new fintech team, OSC LaunchPad, which is designed to function as both an innovation hub and a regulatory sandbox.