FCA chief executive Martin Wheatley has accused the financial services industry of using regulation as an excuse for not taking risks or innovating.
Speaking at a Lansons conference in London today, Wheatley admitted Governments and agencies have been slow to react to technological change in the past.
But he said: “It’s too easy to claim that regulation is always to blame when creativity or innovation slows in financial services.
“It’s no secret that regulators are sometimes used as a shield for firms who simply don’t want to take the risk, so prefer to say that we’d probably stop them anyway.
“So, not a one-sided story here; but regulation clearly should be fleet-footed enough to support progress.”
Wheatley said it is a key objective of the FCA to ensure positive technological developments are supported by the regulatory environment.
He said: “The most immediate priority here for us – and the most pressing I think – is to ensure tech-led improvements to customer experience can be safely fast tracked into the UK.
“And to help this happen, the FCA is working closer than ever before with financial service firms who are developing innovative approaches to service that aren’t explicitly covered by regulatory rules – or where the guidance looks ambivalent.”
He said an important question is whether investment advice “can be automated to deliver returns and security for consumers with straightforward needs”.
Wheatley said technological fraud and data misuse or loss present a “challenging” picture for the industry and create a particular risk in the UK due to the “vulnerability” of firms with legacy systems.