The FCA has published its feedback statement FS16/4 to the call for input on supporting the development and adopters of RegTech.
Following the launch of the call for input (November 2015) the FCA received more than 100 written responses from financial services firms, technology suppliers and start-ups, hosted bilateral meetings and convened 4 roundtables, which consequently shaped FS16/4. The four key themes which emerged were categorised by the FCA as follows:
- Efficiency and collaboration - FS16/4 recognises that technology enables information to be shared more efficiently and that it can provide enhanced flexibility for firms to present their regulatory data and reduce the costs and administrative burden of reporting. Cloud computing may also improve access to innovative software.
- Integration, standards and understanding - FS16/4 concludes that technology can drive efficiencies by reducing the gap between intention and interpretation. For instance, making regulations machine readable would allow enhanced automation and could reduce the cost of change. A more interactive FCA handbook could also facilitate compliance and reporting.
- Predict, learn and simplify - FS16/4 suggests that technology has the capacity to simplify statistics, for example, advanced analytical solutions can interpret vast amounts of structured and unstructured data.
- New directions - FS16/4 concludes that technology should allow regulation and compliance processes to be looked at differently and suggests as an example that biometrics, which measure and analyse people’s characteristics, could be used to better verify identities.
FS16/4 also touches on some of the blockers to innovation, which include uncertainty over regulations, the fact that some firms will continue to invest in legacy systems and that some technology is still in its early developmental phase resulting in uncertainty around its use.