FCA chief backs cash rewards for fintech innovation

Speaking at a CityUK event in Edinburgh, Emily Sheppard praised the Monetary Authority of Singapore (MAS) for hosting the seventh Singapore fintech festival earlier this month. At the event, which attracted more than 62,000 attendees from over 115 countries, MAS awarded prizes of up to S$150,000 (£90,675) to dozens of firms that MAS said had developed solutions to “accelerate the pace of digitalisation, innovation and sustainability in the financial industry

“It is a regulator that invests. I would like to be able to do that. We don’t have that model here, but sometimes thinking outside the box can create better results, Sheppard said. Her comments came days after the UK and Singapore renewed their joint commitment to a financial partnership agreed in 2021, which focuses on sustainable finance, fintech and innovation. Senior officials from the FCA, MAS and the UK Treasury also agreed a memorandum of understanding on the UK-Singapore fintech bridge – designed to support investment and innovation in the sector across both countries.

Sheppard, who retained her role as the FCA’s chief executive of authorizations when she was appointed COO in January, told attendees the authority was already helping to foster “a climate of innovation” in the UK. “As a regulator, we created the world’s first sandbox for regulation, and we continue to invest in it. We have made the path from the sandbox to authorization easier,” she added.

Sheppard reiterated the FCA’s commitment to promoting UK financial services outside of London, citing the recent decision to double the number of FCA officials based in Edinburgh to 400, as well as the newly opened office in Leeds. The regulator also has representation in Wales and Northern Ireland.

She said the FCA’s regional presence was also important in attracting talent to the regulator. “One of the reasons we chose Leeds was because of the propensity of universities around there that produce computer scientists,” Sheppard said. She added that the University of Edinburgh’s reputation as a center of excellence in artificial intelligence also meant it was another place where the FCA hopes to recruit experts “who really understand fintech and understand crypto”.

Sheppard praised the FCA’s use of ‘tech sprints’, events intended to help the regulator develop technology-based solutions to address specific challenges in the financial services industry. “We are now starting to introduce ‘policy sprints’, where we sit down and think about a new way of regulating. We’re changing the way we regulate by looking at data — all the data, the regulatory returns that you have to send us — we look at all of them and see how we use them,” Sheppard said.

She added that the FCA could decide to “remove” the information it requires firms to provide if it finds it does not need it, but added that policy sprints could also uncover cases where the FCA required other information from firms. “We’re looking at that information in real time to see where we need to change and where problems might arise,” Sheppard said.