The FCA Innovation Hub was launched in October 2014 to support financial technology innovators. It provides direct support to innovators through guidance on regulations and applications. It also identifies areas of regulations that could be changed to better support innovation. To get support, innovators must demonstrate their innovation benefits consumers, they have done research on regulations, and need assistance. Aire, a startup using social media to assess creditworthiness, received support as its questions were specific and showed it met the eligibility criteria.

1. Engaging with Innovators:
The FCA’s Innovation Hub
Bob Ferguson
Financial Conduct Authority
Global Fintech Opportunities in Financial Services
Edinburgh, 24 February 2015
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2. Agenda
• Part I – The Innovation Hub
1. What is the FCA?
2. Who do we regulate?
3. Supporting innovation at the FCA
4. Setting up the Innovation Hub
5. The Innovation Hub’s roles
6. Our work so far
• Part II – Getting Support
1. Eligibility criteria
2. How to ask for our support
3. Good practice
4. Case study – AIRE
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3. Part I
The Innovation Hub
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4. What is the FCA?
• The Financial Conduct Authority (FCA)
regulates the Financial Services industry
in the UK.
• More than 70,000 firms are FCA
regulated.
• Many fintech companies require being
FCA regulated.
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5. Examples of firms the FCA regulates
• Deposit taking institutions (e.g. banks)
• Peer-to-peer lending platforms
• Equity crowdfunding platforms
• Insurance brokers
• Financial advisors
• Consumer credit firms
• Payment systems providers
• Credit reference agencies
• …and many more.
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6. Why does FCA support innovation?
• Promoting competition FCA statutory
objective since April 2013.
• Regulators’ historical view - innovation
equals risk.
• With new competition objective – seeing
opportunities as well as risks.
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7. Setting up the Innovation Hub
• Proposals set out in June 2014 and
published call for inputs.
• 6 roundtables with 84 innovators during
August/September 2014.
• Innovation Hub launched on October
28th.
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8. What the Innovation Hub does
• The Hub’s two main roles:
1. Direct support
2. Policy and process change
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9. Direct support provided
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10. Areas for regulatory change identified
• Some policy challenges to be tackled:
• Access to bank accounts
• Regulatory uncertainty
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11. Part II
Getting support
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12. Getting support - Eligibility
• Innovation is genuine.
• Innovation prospectively benefits
consumers (directly or via competition).
• Innovator has done some background
research.
• Innovator needs support.
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13. Getting support – Contacting us
• To help us assess what help we can
offer, submit a ‘Request for Support’, or
send basic info + pitch deck.
• Our contacts:
Phone: +44 (0)2070664488
Email: innovationhub@fca.org.uk
• Happy to meet face-to-face if needed.
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14. Getting support – Good practice
• Providing good description of your
offering.
• “We designed an app that allows users of
our pre-loaded credit card to send money to
each other”
• Asking specific questions.
• “Do we need to apply for an e-money
license or a payment system provider
license, or both?”
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15. Getting support – Not-so-good practice
• Vague descriptions of your offering.
• “We sell a unique and innovative way for
users to manage their money using an app
and a credit card.”
• Asking for support we cannot offer.
• “Do you think there is demand for this
service?”
• “How can the FCA help us promote our
product?”
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16. Case study – Aire
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17. Case study – Aire’s eligibility criteria
• Is it innovative?
• Uses social networks and other unconventional
sources of info to assess credit worthiness.
• Consumer benefit
• Allows access to credit for people with no UK credit
history.
• Background research?
• Questions were specific and made reference to
sections of the FCA Handbook.
• Need for support
• New start-up with staff of 7.
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