With regulatory expectations on the rise for the financial industry, regulators in the United Kingdom are looking for ways to support the introduction of technology designed to help firms meet their compliance obligations.
The U.K. Financial Conduct Authority (FCA) on Monday issued a consultation paper seeking feedback on how the regulator can help support the development and adoption of new technology that aims to help financial firms meet their regulatory obligations — an emerging sector that FCA refers to as “RegTech”.
Since the financial crisis, firms are facing greater reporting requirements and higher regulatory standards, the FCA notes. “In order to enable effective competition and promote innovation, it is important that technologies that help firms better manage regulatory requirements and reduce compliance costs are supported,” the FCA says in a statement. As well, the U.K. government has called on financial regulators to facilitate the growth of this industry segment.
The FCA consultation paper calls for feedback on: the sorts of ways that RegTech can improve efficiency and transparency; where the FCA should focus its efforts to support the development of RegTech; and the risks and challenges faced by firms providing RegTech to the financial industry, and by financial firms in adopting these sorts of technologies.
The consultation paper also asks for input on whether existing rules, policies and guidance are restricting innovation, of the adoption of RegTech solutions.