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Britain has long enjoyed the status of hosting the world’s largest financial markets center, with the vast majority of institutional electronic trading and global banking being conducted from London’s Square Mile. Despite London’s name as the benchmark location for finance, technological aptitude has been notable by its absence, with most large banks and FX firms in the region having had to resort to developing their own platforms and infrastructure on a proprietary basis, which is expensive and resource-hungry.
Part of this is down to the unique nature of the British markets, which require specialist systems for the execution of transactions, however another reason is the nation’s regulatory authority’s relatively retrograde approach toward the use of technology in financial markets.
This is set to change, a dynamic which was recently hinted at by encumbant Chancellor of the Exchequer George Osborne, whose aim is to ensure that London not only remains at the top of the global financial ecosystem, but also becomes recognized as a technological and innovation center.
Today, a further step in this direction has been made by Britain’s national non-bank regulatory authority the Financial Conduct Authority (FCA) in its launch of the Innovation Hub, part of Project Innovate, is now open and offering support to innovators.
Project Innovate has been developed by the FCA to foster competition and growth in financial services by supporting both small and large businesses that are developing products that could genuinely improve services for consumers.
The FCA’s chief executive, Martin Wheatley, will mark the opening of the Innovation Hub in a speech at Financial News’ Fintech Conference in London later today.
“The Innovation Hub is part of our commitment to support innovation by opening doors to those – regulated and not – who come with fresh ideas about how to deliver financial services.
“This work levels the playing field by giving all firms eager to innovate access to our expertise so that the process of joining the financial markets or introducing new products does not seem so daunting.”
The Innovation Hub will provide direct support from a team of dedicated FCA staff to both regulated and non-regulated innovators. In order to receive support from the FCA, businesses will need to show that their innovation could bring benefits to the end consumer, either an individual or business.
The Innovation Hub will provide businesses who qualify with access to the following services:
· a dedicated contact for innovation-related queries, including provision of individual guidance and informal steers, as appropriate;
· continuation of additional support for up to a year after authorisation (for those firms who have been supported through the authorisations process);
· help to understand the regulatory framework and how it applies.
· identify areas where the regulatory regime needs to adapt to facilitate innovation;
· use the expertise gained through our work with firms to inform future policy development in a way that supports innovation.
The full criteria that will be used to assess requests for support is available on the FCA website.