Featured Product

    FCA Report Examines Results of Digital Sandbox Pilot Initiative

    April 27, 2021

    FCA published a report on evaluation of the Digital Sandbox pilot among the financial services firms in UK. The report sets out lessons learned and other key findings from the pilot phase, including how the pilot accelerated the development of innovative products and solutions in financial services. In partnership with the City of London Corporation, FCA piloted the Digital Sandbox to provide support to innovative firms tackling challenges caused by the COVID-19 pandemic. Ninety-four organizations applied while twenty-eight were selected to take part in the eleven-week pilot, which ended in February 2021.

    As part of the pilot, participants had access to a range of development tools, such as synthetic data assets for testing and developing proofs of concepts, an Application Programming Interface (API) marketplace, a coding environment, and access to expert mentors and observers. While it is too early to assess the long-term outcomes for participating firms, the ongoing evaluation and feedback from participants has indicated a range of benefits. These benefits include acceleration of product development, validation and improvement of artificial intelligence and machine learning models, refinement of business plans, and networking within the pilot ecosystem. The key lessons from the pilot include the following:

    • There is significant industry demand, particularly from early-stage firms and startups, for a digital testing environment. Analysis and feedback indicated that access to data and the benefits of an ecosystem convened by the regulator were the biggest underserviced market needs.
    • Access to the digital sandbox was successful in accelerating early stage proof of concept development and improving product design, to varying degrees.
    • The synthetic data was the most valuable feature cited by participants while simultaneously the one with greatest potential for improvement.
    • Future cohorts should have a narrower focus which would result in more sustained engagement from a closer-knit ecosystem, and fewer data assets being required to meet the use cases, resulting in greater depth and granularity for those produced.
    • The application and approval process should be brought forward, and successful applicants onboarded earlier in the process. Participants should then be involved in the data generation process so that data could be tailored to match their development needs
    • Participants would benefit from a more structured journey through the cohort, rather than the digital sandbox being a "self-service" platform. The expectations of expert mentors should also be clarified and formalized, to tackle inconsistent contributions.

    Based on the feedback collected throughout the pilot and an independent evaluation and to support the Kalifa Review recommendation of a permanent digital testing environment, FCA and the City of London Corporation will:

    • Run a second cohort of the digital sandbox in late 2021.
    • Further iterate and improve the digital sandbox testing environment by incorporating the lessons learned from the initial pilot and making the suggested improvements to the platform.
    • Expand on the use of the digital sandbox testing environment to highlight the opportunities and value it contributes to the financial services ecosystem.
    • Focus the efforts of this second cohort around the theme of sustainability/climate change to support the green finance ambitions of UK, ahead of hosting the COP26 UN Climate Change Conference in November 2021.
    • Explore, with industry and other stakeholders, viable sustainable operating models for a future, permanent version of the digital sandbox.

     

    Related Links

    Keywords: Europe, EU, Banking, Reporting, Basel, CRR2, Reporting Framework 3.0, DPM, Taxonomy, IFR, COREP, FINREP, Investment Firms, FRTB, EBA

    Featured Experts
    Related Articles
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    EC to Defer Application of SFDR Standards Till July 2022

    The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.

    July 23, 2021 WebPage Regulatory News
    News

    EIOPA Consults on Reporting and Disclosures Under Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.

    July 23, 2021 WebPage Regulatory News
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7295