Eight out of 44 applicant firms have passed an initial screening by GFIN members, and will now develop testing plans for regulators to consider and approve.
On Monday (29 April) the UK’s FCA (Financial Conduct Authority) announced that eight firms have passed an initial screening to begin cross-border testing of new fintech and regtech offerings as early as Q2 this year, under the auspices of the GFIN (Global Financial Innovation Network).
A global “sandbox” initiative, the GFIN was established to facilitate cross-border testing of innovative products, services and business models in the financial sector. It provides an efficient way for participating firms to interact with regulators and to navigate the requirements of different jurisdictions, while also setting out a new framework for regulators to cooperate and share information on innovation-related topics.
Currently chaired by the FCA, the GFIN now comprises 35 organisations, including ASIC (Australian Securities and Investments Commission), HKMA (Hong Kong Monetary Authority), SFC (Hong Kong’s Securities and Futures Commission), MAS (Monetary Authority of Singapore), and regulatory bodies in the US, Canada, UAE, Bahrain and Guernsey, among others.
Following its official launch in January this year, the GFIN opened applications to possible participants in February, with the expectation that cross-border testing would start in Q2 2019.
In total, 44 applications were submitted across 17 participating regulators. The eight firms that have passed the initial screening will now develop testing plans for regulators to consider and approve, before the testing phase can begin.
“These are propositions that are not just tinkering around the edges of the status quo, but have the potential to fundamentally change how things are done,” said FCA executive director of strategy and competition Christopher Woolard, speaking at the Innovate Finance Global Summit in London on Monday (29 April).
“These are issues that cannot be solved in isolation, one market at a time. Truly global challenges require a global response and GFIN lets us test whether this can become reality,” he added.
“The GFIN initiative is an import step in bringing greater maturity to the market for fintech and regtech offerings,” said Stephen Scott, co-founder of Starling Trust, one of the firms which passed the initial screening. The company has been invited to collaborate with four regulators so far – the FCA, ASIC, HKMA, and DFSA (Dubai Financial Services Authority) – and is the only company selected that works specifically in the culture and conduct risk management space.
“The issues we address impact firms across their global footprint, touching business lines and functions in many jurisdictions, and banks must have confidence that the solutions they adopt will satisfy regulatory interests across that broad landscape. The collaborative and cross-border nature of the trials we’ll conduct through the GFIN will go a long way towards creating that confidence,” Scott added.
The firms selected for the cross-border testing pilot will be announced late in the second quarter.
