Featured Product

    Nick Cook of FCA on Moving from Innovation Hub to Innovation Culture

    June 05, 2019

    Nick Cook, Director of Innovation at FCA spoke at the 6th Central Bank Executive Summit about how data and technology have, and are, changing the way FCA regulates, the ways FCA has reacted to and embraced that change, and how this approach has evolved over time. He also addressed the issues of what regulators and central banks will need to look like in the near future, the actions they will need to take, the resources they will need at their disposal, and the type of culture they will need to create: "a culture where innovation and new ways of approaching old problems are considered business as usual, rather than being undertaken in a ring-fenced or siloed function unique and distinct from the organization that it sits in."

    He emphasized that "a regulator should enable change to happen" and "the driver behind this need for change is in part the enormous and quickening pace of development and progress in the use of technology and data within financial services." He outlined the success achieved by FCA in the area of regtech, wherein FCA held TechSprints to encourage collaboration and new ideas and observed and supported proofs of concepts to encourage firms to think about how technology could make them more efficient at complying with regulation. Next, he explained the FCA ambitions, including its work toward international engagement via the Global Financial Innovation Network or GFIN, global regtech work, chairing of the IOSCO FinTech network, and formal and informal knowledge-sharing arrangements with authorities such as MAS, Australian Securities & Investments Commission (ASIC), Financial Industry Regulatory Authority (FINRA), and FDIC. Depending on what the future brings, FCA will also be a keen participant of the European Forum for Innovation Facilitators, said Mr. Cook. The second ambition of FCA involves actively stimulating innovation in the market to deliver public value. To this end, FCA has identified GreenTech as a priority and will hold a second AML & Financial Crime TechSprint in London in July 2019. He added that the third area of FCA ambition is "around changing ourselves as a regulator." 

    The ambition is to instigate a cultural change in an organization that goes beyond the creation of Innovation Divisions and Innovation Directors. He mentioned adopting "suptech" programs to become more efficient and effective, to keep in step with the sweeping change that technology is instigating in the markets, and the firms that FCA regulates. One way FCA is doing this is through its digital regulatory reporting work. As part of this work, FCA is investigating how technology can fundamentally change the interface between FCA and the regulated firms by making parts of its Handbook machine-readable and machine-executable. In the longer term, bringing these data and analytics capabilities together to deliver near real-time monitoring of priority markets, to allow us to identify harm rapidly and to deter misconduct, is the goal.

    Finally, he discussed the challenges in the area of regtech, with one of them being the unavailability of an array of "off-the-shelf" technology solutions available for regulators and central banks. The regtech market is not fully able to "service our needs at this stage" and "we need to develop the solutions ourselves, in-house," added Mr. Cook. Another challenge, according to him, is "how we make this change lasting" and "make innovation part of our DNA, our business as usual." He said that, "It may seem odd for a leader of an Innovation Division to call for federating innovation capabilities rather than centralizing them, but, I believe, we will not achieve the transformation and outcomes we desire if the innovation activities remain contained within ring-fenced innovation functions. We must empower and engage our wider organization and federate new skills, capabilities, and behaviors widely."

     

    Related Link: Speech

     

    Keywords: Europe, UK, Banking, Insurance, Securities, Regtech, Suptech, Fintech, Innovation Culture, FCA

    Related Articles
    News

    APRA Revises Related Entities Standard for Banks

    APRA published a strengthened prudential standard APS 222 on associations with related entities, with the aim to mitigate contagion risk within banking groups.

    August 20, 2019 WebPage Regulatory News
    News

    FSB on Responses to Consultation on Wind-Down of Trading Portfolios

    FSB published responses received to the consultation on the solvent wind-down of the derivatives and trading book portfolio of a global systemically important bank (G-SIB).

    August 19, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Consultation on Resolvability Disclosures

    FSB published responses received to the consultation on disclosures for resolution planning and resolvability of banks.

    August 19, 2019 WebPage Regulatory News
    News

    HKMA Revises Implementation Schedule for Initial Margin Rules

    HKMA intends to adopt a revised implementation schedule for the margin requirements for non-centrally cleared derivatives.

    August 16, 2019 WebPage Regulatory News
    News

    HKMA Revises Guideline on Application of Banking Disclosure Rules

    HKMA issued a revised version of the Supervisory Policy Manual module CA-D-1 on guideline on the application of the Banking (Disclosure) Rules (BDR).

    August 16, 2019 WebPage Regulatory News
    News

    ECB Decision on Recognizing Reporting Member States Under AnaCredit

    ECB has finalized the Decision 2019/1348 (ECB/2019/20) that establishes procedure for recognizing non-euro area member states as reporting member states under the AnaCredit Regulation (EU 2016/867).

    August 16, 2019 WebPage Regulatory News
    News

    FASB Proposes to Extend CECL Standard Deadline for Certain Entities

    FASB proposed an Accounting Standards Update that would grant private companies, not-for-profit organizations, and certain small public companies additional time to implement FASB standards on current expected credit losses (CECL), leases, and hedging.

    August 15, 2019 WebPage Regulatory News
    News

    IASB Adds Phase Two of IBOR Reform to Its Work Plan

    IASB (or the Board) has added the second phase of its project focused on potential financial reporting implications linked to the interest rate benchmark reform—interbank offer rate (IBOR) reform—to its work plan.

    August 15, 2019 WebPage Regulatory News
    News

    FED Updates Draft Instructions for Proposed FR Y-14 Reporting Forms

    FED updated draft instructions for the monthly, quarterly, and annual capital assessments and stress testing reports, also known as forms FR Y-14M, FR Y-14Q, FR Y-14A, respectively.

    August 15, 2019 WebPage Regulatory News
    News

    FASB Proposes Taxonomy Changes Related to Topics 326, 815, and 842

    FASB is proposing taxonomy improvements for the proposed Accounting Standards Update on clarifying the interactions among topic 321 on investments in equity securities), topic 323 on investments under equity method and joint ventures), and topic 815 on derivatives and hedging.

    August 15, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3665