Prudential says innovation is now 'a dirty word'

7 July 2011 12:29 pm | By Natalie Holt

Prudential says providers must retain the flexibility to design innovative products as the regulator moves to intervene on product development, warning that innovation has become “a dirty word”.

The Government’s draft financial services bill, published last month, proposes that the FCA will be granted early intervention powers such as the ability to ban products and publish early warning notices.

Speaking as part of a panel session at an FSA conference on the Financial Conduct Authority last week, Prudential chief executive Tidjane Thiam said a well regulated financial sector is one in which firms interact constructively with the regulator and are quick to co-operate.

But he went on to say that the regulator and the industry should guard against moving to a style of regulation that stifles innovation.

He said: “Firms in our sector must be allowed by the regulator to design and market products in a flexible and imaginative way, driving innovation for the benefit of consumers and the economy at large.

“Innovation for some has become a dirty word following the financial crisis but the reality is that this nation and its people will not benefit from a financial services industry that is stultified and unable to adapt to change in competition in a fast moving, fast changing world.”

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