The 22 companies to make the FCA’s sixth regulatory sandbox

The UK’s Financial Conduct Authority has named the 22 companies to be make the sixth cohort of its regulatory sandbox.

The regulator whittled the group down from a total of 68 applications coming from companies operating in the UK and overseas. Most of the applicants were looking to operate in the retail banking, payments and retail lending sectors.

The new sandbox cohort is slightly smaller than the fifth cohort, which had 29 participants.

For the first time, the FCA used the regulator to reach out to areas it wished to see more innovation. These included making finance work for everyone and supporting the UK in the move to a greener economy.

Over half of the applicants were propositions looking to address issues around access and exclusion to financial services and vulnerable customers, with two of the successful applicants developing sustainable finance models.

The regulator is also working with strategic partners and the industry to pilot a digital sandbox, which will offer enhanced regulatory support for firms tackling challenges caused by the coronavirus.

Companies in the sixth cohort include:

AgeWage is one of the companies to make the sixth cohort. The company provides a way for people to better understand their pension pot by supplying advice and a dashboard to better understand their financial future.

HUB Financial Solutions, another WealthTech solution, provides people with advice around their pensions, comparing outcomes, retirement options, equity releases and more.

There are a number of RegTech platforms to make the sixth sandbox. One of these is DLA Piper, which has built a rules-based methodology to digitally manage regulatory compliance around digital assets.

Another RegTech platform in the cohort is YourBlock, a consumer privacy focused platform that provides secure tools for consumers to store and make use of their personal data to access financial products and services. The company will initially focus on the motor insurance space.

Blockchain-based e-money platform AID:Tech is another RegTech in the new cohort. Users can receive a verified digital identity that can be used to access other services.

Another blockchain company in the cohort is FundAdminChain. The FinTech has created a private distributed ledger network that enables the launch and trading of investment funds. Investors and product providers can use the solution to connect, transact and settle at a lower cost.

Climate Chain is one of startups looking to build sustainable products. The app encourages consumers to spend their money on sustainable products and services. It leverages open banking technology to track user’s spending habits, with users rewarded through discounts for buying products with net-zero emission targets.

Hitachi Europe Limited is joining the sandbox to build a climate-focused solution. The “Sustainable Finance Platform” aims to increase the support of green projects by connecting investor or lenders with entrepreneurs.

A number of lending technology companies made the list, one of which is CrediCar. The digital lending platform enables financial providers and car dealers to give consumers better access to auto finance products, personalised finance quotes suited to their individual credit risk and affordability profiles.

Fronted is a rental deposit cash advance company which pays the deposit on behalf of the customer, removing the heavy financial burden of starting a tenancy. The renter simply repairs Fronted in monthly instalments.

Another lending platform in the cohort is Crowdz UK, an invoice financing platform using smart contracts on blockchain to tokenise invoices and reroute payments.

Huozhi supports the funding of essential goods and services for families, paid workers and businesses in crisis zones where traditional financial services are not available.

Fraud prevention company Hipay is teaming up with Alipay, Wechat Pay and other payment institutions to create a contact-free QR code payment solution for public transport across the UK. The test aims to offer a diversified cross-border payment e-wallet platform.

Faizpay is a multi-channel payment initiation service helping merchants use their near field communication card technology with a smartphone or tablet to improve transaction options.

Moneyfold is a distributed ledger technology-based e-money solution that lets users pay online by transforming a web address into a destination for receiving money.

Financial wellbeing platform Mintago has also joined the sandbox to improve the development of its services. The company gives employees educational tools to improve their financial future and better understand the short and long-term trade-offs on spending habits.

Sharia-compliant FinTech platform My Ahmed Ltd aims to support the development of its Zakat donation calculation tool.

Nest Insight offers automatic enrolment into a payroll deduction emergency savings tool and aims to improve pension contributions and short-term financial resilience.

NestEgg, a mobile app that uses financial health indicators to improve lending decisions and improve vulnerable borrowers ability to access loans.

ING Bank has teamed up with ABN AMRO, BNP Paribas Securities Services, Invesco, Societe Generale – Forge, State Street, UBS and others to create Project Pyctor. This is a decentralised permission network that aims to provide digital asset safekeeping and transaction services, with a focus on regulated security tokens issued either on private or public blockchain.

One of the few InsurTechs to make the group is Weather Solutions, which compensates holders for heightened energy costs during colder than normal winters.

Finally, StudentFinance is a digital platform that helps students streamline their higher education payments.

Copyright © 2020 FinTech Global

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