To help the financial sector address challenges created by Covid-19, the U.K.’s Financial Conduct Authority (FCA) is creating a “digital sandbox” to foster industry innovation.
In partnership with the City of London, the FCA said that it will develop a digital testing environment that will provide firms with access to high-quality data to enable testing of innovative ideas.
To start, it will focus on firms looking to address pandemic-related challenges, such as detecting and preventing scams, supporting vulnerable customers and improving access to financing for small companies that have been negatively impacted by the pandemic.
“Building on our existing work supporting innovation in the market, we are now helping to establish a platform to tackle the challenges that will face the financial services sector in the recovery from Covid-19,” said Christopher Woolard, interim CEO of the FCA.
“Innovation is a powerful driver of effective competition and can help to accelerate the development of new solutions to emerging challenges,” Woolard added.
The goal of fostering innovation through expanded use of regulatory sandboxes was also recommended in a recent report from an Ontario government task force.
That report called for the creation of a new provincial sandbox by the Ontario Securities Commission and the Financial Services Regulatory Authority of Ontario, and proposed the eventual development of a “Canadian Super Sandbox” involving all provincial and federal financial regulators that would enable firms to test innovative ideas.