FCA launches permanent Digital Sandbox to boost innovation
The UK’s Financial Conduct Authority (FCA) is launching a permanent Digital Sandbox following two successful pilots to help support innovative business, start-ups and data providers.
From 1 August 2023 the Digital Sandbox will act as testing environment that will provide businesses and innovators with support at the early stage of product development which saw more than half of the pilot scheme SME participants make positive developments in areas such as launching new products and funding.
According to the FCA, the Sandbox will provide participants access to high-quality datasets, , robust data security protection, a collaborative platform to share learnings and an observation deck to enable interested parties such as regulators to observe in-flight testing.
Industry players in sectors such as banking, investment, lending, payments, insurance, pensions and more will have access to this piece of testing equipment which will foster much needed innovation and growth within industries.
Henry Balani, global head of industry and regulatory affairs at Encompass Corporation, said the Sandbox represents a “positive step” when it comes to supporting innovation, and particularly for RegTech (regulatory technology) providers striving to deliver technology solutions that can bring significant business benefits.
“Crucially, this approach positively supports the development and testing of financial products in a safe, robust and non-market disruptive manner, where lessons can be learned.”
Balani added that RegTech has an increasingly important role to play, with financial institutions looking to balance responding to an evolving and stringent regulatory landscape with maximising operations, “which means facilitating the development of solutions that can support these institutions is vital”.
Sheeraz Saleem, chief technology officer at DKK Partners, said that technology is evolving at an incredible pace and this “is not something we should be fearful of, but instead, look to capitalising upon its benefits.
“SMEs are innovation drivers but many lack the support needed to grow and it is now time for their needs to be met.”
“With the support from public bodies such as the FCA, businesses across multiple sectors can look to further developing their technological offerings in areas such as foreign exchange, catapulting the UK forward in the global innovation race.”
The UK government also announced this week that it is set to bring in leading AI and data experts from the private sector to catapult tech skills and innovation into government departments.
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