Call for blockchain and biometrics boost to UK’s regtech
Blockchain and biometrics could be the way forward for the future of the UK’s regtech industry, according to the findings of the Financial Conduct Authority (FCA).
The FCA issued a call for input in November 2015 about the development and adoption of regtech; and more than 350 responses were received. Of that number, 43% were from technology suppliers, 23% from financial services organisations (banks, building societies, payment providers, think tanks and trade bodies) and 23% from consultancies.
Today (20 July), the FCA published its results in an 18-page report. Responses covered a broad range of opinions and were summarised into four groups: efficiency and collaboration; integration, standards and understanding; predict, learn and simplify; and new directions.
No information was provided in the report as to which area had greater interest or urgency from the respondents, but perhaps unsurprisingly, blockchain/distributed ledger was mentioned as a “new direction”.
Some responses said “distributed ledgers could improve system integrity and increase transparency”, which in turn “could transform processes, reduce costs and potentially redefine how data is shared”.
Biometric technology was also cited as a way of the future as it “could allow more efficient and/or robust ways to verify identity”.
Others wanted greater use of the cloud – such as “technology that allows firms to share services (such as a Know Your Customer utility) via the cloud and/or online platforms”.
While others called for a “robo-handbook”. This would allow firms to interact with regulation to understand the impact of this to their systems and processes. It seems some people want a more interactive FCA handbook “better tailored to the firm’s permissions”, which as a result could make compliance and reporting requirements “clearer”.
In terms of the FCA’s role in future regtech, there were calls for “improved collaboration and engagement” and an FCA certification of regtech.
For 2016 and 2017, the FCA didn’t go into any real specifics but says it will “work to promote innovation” and adds that “creating a competitive marketplace is a priority” for regtech.
The FCA says it is keen to take all this input onboard and says it intends to “concentrate our efforts on increasing our engagement and collaboration with the regtech community”.