Innovate Finance Responds To HM Treasury Proposals On Fintech Competitiveness

Innovate Finance has issued a response to the Call for Proposals by the HM Treasury. The HM Treasury had proposed how to determine fintech success concerning the new secondary goals of financial market regulators. In its response, Innovate Finance advocated for supporting innovation in fintechs to boost competitiveness.

Innovate Finance responds to HM Treasury

The new secondary objectives mentioned by the HM Treasury were introduced by the Financial Services and Markets Act (FSMA). These objectives include the key requirements needed to assess the performance of regulators such as the FCA in achieving their goals on the competitiveness of UK fintechs.

FSMA has granted powers to the HM Treasury to set the performance metrics that will measure the performance. In the submission, Innovate Finance proposed several metrics and actions to ensure compliance with these objectives.

Innovate Finance has also advocated for a review of the existing customer regulations to identify any duplication or contradiction with the new Customer Duty and release the old “tick-box” regulations.

Innovate Finance has also advocated for a new “RegTech test” after the FCA and the PRA launched new regulations to assess how technology can achieve regulatory compliance.

The new framework shifted from the overall approach to regulations where small firms have to meet similar requirements as the largest companies. Moreover, there was also a need to use resources and expertise to better understand and support innovation across the fintech industry.

Some measures that need to be adopted include having dedicated account managers for fintech firms after these firms move out of the sandbox and growth programs. These firms could also have a similar “named contact” supervisor working with large institutions. Faster authorizations were also needed to reduce delays in selecting the key personnel and regulatory market approvals for fintechs.

Attracting more fintechs

While commenting on this development, the CEO of Innovate Finance, Janine Hirt, said that the in the last ten years, the UK had emerged as a leading hub for fintech operations globally. The growth in the sector was attributed to regulators that supported innovation.

However, Hirt noted that the UK was at risk of falling behind as other countries caught up. In this case, the UK was among the leading places globally that could support the scalability of fintechs and boost talent growth while driving capital and international businesses within the UK economy.

The offerings offered by the UK fintech market will be made possible by a dynamic and proportionate regulatory framework that positions the UK as the global leader for fintech operations.

According to Hirt, technology and the fintechs that integrated this offering were vital in the financial service industry. In this case, there was a need to support new regulatory frameworks that supported innovation. These new policies could create agile regulators protecting consumers and market competitiveness to bring innovation to the financial service industry.