Jessica Rusu, Chief Data, Information, and Intelligence Officer at the FCA, addressed attendees at the Innovate Finance Global Summit at the Guildhall in London, focusing on the importance of regulation in safeguarding both the public and the financial industry’s infrastructure.
During her talk, Rusu announced that for the first time in the UK, the FCA is establishing a permanent digital sandbox. This innovative platform will integrate synthetic data, transaction data, and market data from various sectors, including payments, banking, investment, and fintech, amassing over 200 datasets. Additionally, the sandbox will incorporate data from both consumers and companies to facilitate an open API marketplace, granting access to academics, government organizations, venture capitalists, and charities.
She emphasized that “from this summer, the FCA digital sandbox will expand to support a broader range of investors. […] The FCA benefits from supporting this innovation by promoting solutions to complex regulatory challenges like APP fraud, greenwashing, and scam detection. A key reason for investing in technology and innovation is to enhance support and regulation. Our digital transformation initiatives are aimed at driving efficiencies and minimizing the regulatory burden for firms.”
The digital sandbox features a competitive selection process, assessing companies based on their potential to significantly impact the financial services sector.
NayaOne plans to collaborate closely with the FCA and other industry leaders to foster innovation and create new opportunities in financial services. This represents a major achievement for NayaOne as its digital transformation platform continues to offer advanced solutions that help financial institutions remain competitive.
NayaOne CEO Karan Jain expressed enthusiasm about being selected for this opportunity, stating, “We are excited to collaborate with the FCA to drive innovation in financial services. Our digital transformation platform and synthetic data technology will be instrumental in assisting fintech companies in developing and testing their products more efficiently. We look forward to building our relationship with the FCA and contributing to their future developments within the industry.”
In her keynote speech at IFGS 2023, Rusu outlined the FCA’s technology initiatives for the year, highlighting their proactive approach. She referenced the APP Fraud Tech Sprint launched at IFGS 2022 and noted that the FCA has since doubled the number of sprints addressing various issues, including the cost of living and sustainability.
To further alleviate regulatory burdens, Rusu introduced the Digital Front Door initiative, which digitizes forms and streamlines data processing. The application forms for both the sandbox and Innovation Pathways have also been simplified.
Additionally, the FCA has launched a Global Tech Sprint in collaboration with 23 regulators and 80 organizations from the Global Financial Innovation Network. This initiative invites companies to propose solutions to global challenges in areas such as ESG, AI, and cryptocurrency.
Lastly, Rusu highlighted ongoing work on AI regulation, noting that the FCA has undertaken significant efforts to understand AI and its regulatory implications, citing justified concerns about the potential for chaos. She remarked that the UK’s recently published AI white paper includes industry feedback on regulatory approaches and emphasizes the need for collaboration to create a suitable framework for AI in financial services.
Rusu stated, “AI plays a fundamental role in innovation and supports many transformative business models. The potential of AI is vast, especially when paired with quantum computing. However, this fast-paced environment requires careful consideration. The usage of synthetic data and other privacy-enhancing technologies offers valuable data mining avenues while protecting sensitive information.”
She concluded with a strong message about the need for regulators to embrace innovation: “Now more than ever, firms require regulators to take the lead in fostering innovation. Data, technology, and innovation teams are crucial in maintaining the safety and adaptation of our dynamic financial services sector, ensuring the UK remains a leading financial hub. Creating favorable conditions for innovation and investment will enhance our competitiveness and drive growth opportunities.”