The Financial Conduct Authority (FCA) has revealed it will launch a ‘regulatory nursery’ for new FinTech companies in autumn of this year.
The aim of the new nursery is to provide enhanced regulatory oversight to newly authorised fintech businesses.
The FCA CEO Nikhil Rathi claimed a period of enhanced oversight of the new firms will help them to develop and grow through using their regulatory status while keeping a closer eye on consumer protections.
In a speech at UK Fintech Week, Rathi said, “Currently, firms gain regulatory status and are treated in the same way as a firm with a long track record. The regulatory nursery will keep us in close contact with firms immediately post-authorisation so we can provide support and, where we need to, intervene earlier to steer firms in the right direction.
“This can do so much for consumers looking for easier, more intuitive access to services and new ways of transacting and investing, as well as supporting the future of the UK economy.
“But to achieve truly fair, competitive markets in service of consumers we must be rigorous. Trust in our financial services can only be built by also levelling the playing field so those firms who play by the rules, who genuinely work in their customers’ interests, are not disadvantaged by those who can’t or won’t.”
The FCA CEO highlighted a fact that seven in ten people now use the services of at least one fintech business. Apparently, this figure is higher in the UK than in equivalent markets.
He added the FCA must constantly seek to ‘level the playing field’ in the area of fintech, in order to aid new entrants in testing their ideas and securing regulatory approval.
Rathi commented, “The choice created by competitive markets is, in itself, not a social or economic good. It only becomes one when it delivers better or cheaper products, an improved or more tailored service, and pushes incumbents to fight harder to attract and keep their customers”.
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