The Financial Conduct Authority (FCA) will strengthen ties with regional fintech hubs across the UK in efforts to ensure “as level a playing field as possible” for novel business concepts – regardless of where they emerge.
In a speech to industry players in Leeds, FCA strategy and competition chief Christopher Woolard welcomed the steady rise of regional fintech hubs not only in that city, but in Manchester, Edinburgh and Glasgow, too.
For Woolard, the fertility of those hubs requires his organisation to “make it easier for firms considering new innovations to get advice or informal steers” from its experts, no matter where they operate.
Woolard noted that one of the most tangible ways in which regional hubs are affecting the broader fintech conversation is through their beneficiaries’ entry into the FCA’s Sandbox initiative: a scheme that enables firms to test-run their innovations in a controlled environment.
“Already we are seeing progress,” he said. “In our first sandbox cohort, around two-thirds of our firms were from London, or London based, with very few from other parts of the UK.”
In the latest cohort, though, “the proportion of firms in London is down to just over half, with more regional representation”.
He went on: “Our experience with the Sandbox has shown that we are willing to support a breadth of firms. Whether that be a well-established organisation trialling a new way of delivering its services, or… a regional start-up trialling a completely new product with new technology.”
Woolard explained that, to gauge what sort of additional help the FCA should provide to the regions, he has met with fintech envoy for Scotland Louise Smith, plus Northern powerhouse envoys Claire Braithwaite and Dr Chris Sier – along with representatives from Leeds City Council, Leeds City Regional Enterprise Partnerships and the Manchester Inward Investment Agency.
“And crucially,” he said, “I’ve met the innovators and firms who will make this all happen.”
One of the most common complaints Woolard heard from regional fintech firms was, “We have the technology, we’ve engaged firms and VCs, we have a lower cost of doing business, we have supportive local government, we have world-class universities and research – but we don’t have the same access to regulatory support [as firms in the Capital].”
As such, he said, the FCA will “bring the regulatory support we offer on the road”, working alongside local authorities, development partners and firms in the hub locations, as well as with the Scottish government and the Treasury’s digital envoys.
“This is all about breaking down barriers,” Woolard stressed. “Where firms have to travel great distance, or can only receive the support they need over the phone, it acts as a barrier to engaging. We are seeking to make it as easy as possible for firms to engage with the regulator.
“We want to get to a stage where regardless of where a good idea is conceived, it has an equal chance of coming to fruition.”