Aug 10, 2018

The FCA unveil the world’s first global fintech sandbox

It was announced yesterday that 11 financial regulators and related organisations from across the UK, China and the US would collaborate on the first-ever global fintech sandbox.

What is the global fintech sandbox?

This initiative gives growing businesses from around the globe an open platform to trial new products and initiatives in multiple global markets simultaneously, reducing the complexity of innovating across borders. The Global Financial Innovation Network (GFIN) formalises plans mooted in February this year to create a global sandbox and a new framework shared by service providers and regulators. This approach will benefit both sides as they share experience and best practice whilst supporting continued investment and growth in the fintech industry around the world.

Who are the Global Financial Innovation Network?

The GFIN are an inclusive group of 11 global financial regulators and related organisations who have taken a truly collaborative approach to a global problem of scaling at speed across borders. Current membership of this network includes:

  • Abu Dhabi Global Market (ADGM)
  • Autorité des marchés financiers (AMF)
  • Australian Securities & Investments Commission (ASIC)
  • Central Bank of Bahrain (CBB)
  • Bureau of Consumer Financial Protection (BCFP, USA)
  • Dubai Financial Services Authority (DFSA)
  • Financial Conduct Authority (FCA, UK)
  • Guernsey Financial Services Commission (GFSC)
  • Hong Kong Monetary Authority (HKMA)
  • Monetary Authority of Singapore (MAS)
  • Ontario Securities Commission (OSC, Canada)
  • Consultative Group to Assist the Poor (CGAP)

Why was the global fintech sandbox developed?

Following positive feedback from the initial consultation on the global fintech sandbox, responders raised a number of key themes including:

  • Collaborative regulation – maintaining best practice solutions which work in every jurisdiction
  • Market speed – opening up access to international markets enabling more competition
  • Strong governance – transparency and fairness to firms applying for cross-border testing
  • Emerging technologies – a wide range of items including artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings (ICOs), know your customer (KYC) and anti-money laundering (AML)

What’s next for the Global Financial Innovation Network?

The GFIN is launching a consultation on the role it should play in delivering its core objectives and the tools it will use to deliver these. The main objectives of the GFIN are listed as follows:

  • act as a network of regulators to collaborate and share experience of innovation in respective markets including emerging technologies and business models
  • provide a forum for joint policy work and discussions
  • provide firms with an environment in which to trial cross-border solutions.

Whilst this move could greatly reduce time, cost and complexity for scaling business globally, there are concerns over how regulatory bodies can monitor and stay on top of an already rapidly evolving sector, ensuring end users are protected.

The GFIN are seeking feedback on the consultation by October 14th, and we will report back to you on any advancements in this exciting initiative.

Get in touch with SmartDebit to talk about our recurring payments solutions. We help organisations and businesses reduce customer churn and fees, and improve reporting.

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