The regulator’s Project Innovate does not impose an unfair subsidy on regulated firms to support those seeking authorisation, says FCA chief executive Martin Wheatley.
In a speech at Financial News’ Fintech conference in London today to mark the launch of an ‘innovation hub’ aimed at supporting the development of new products, Wheatley said there is a fear in the market that the project gives innovators “special treatment” and is subsidised by other firms.
He said: “We are indeed focused on giving extra support to innovators. Innovation can bring benefits to consumers and our mission is to markets work well for consumers.
“Also, innovators have a particular need for our help in navigating regulation. They are less likely to fit neatly within existing regulatory categories.
“I think the fear is rooted in misconceptions about this work. For a start, regulated firms are in scope.
“As well as this, the largest firms already have direct access to the regulator through their supervisors. What we are doing here is going some way to redressing that imbalance. I certainly don’t see that as unfair.”
Wheatley said the innovation hub, which is open to both regulated and non-regulated firms, will have two main strands to its work: giving direct support to innovators, and considering how the FCA should adapt its regime to promote innovation.
He said the direct support will include giving “informal steers” to firms seeking guidance.
He said: “This is different from more formal guidance – firms will rely on what we tell them at their own risk. But it means we can share our thinking a lot more quickly.”
Wheatley said the FCA will also work with firms to test innovative tools.
He said: “We will begin with new approaches to disclosure. Behavioural economics is being used by big banks and others. They are developing new ways of giving information to customers.
“We want to work with these firms to see if, for example, customised videos are more effective than ink and paper. We will then use what we learn to update our rules.”
Wheatley added that the regulator’s commitment to innovation is not a “fad”.
He said: “Project Innovate is here to stay. Our commitment to fostering innovation in the interests of consumers is not a fad. It is now an important part of our regulatory philosophy.
“Opening our Innovation Hub is the first concrete output. But we will continue to adapt our approach. We will keep an open mind about what else we can do.”