16/06/2017
Businesses with ideas for innovative products, services, business models or delivery methods for the financial service sector have until 31 July to enter them for the third phase of the ‘regulatory sandbox’ – the Financial Conduct Authority initiative that allows them to test their innovations in the real market, with real consumers.
Launched in 2014, the regulatory sandbox is an FCA-supervised space in which authorised and unauthorized firms of all sizes can pilot their innovations on a small scale with a limited number of customers.
Each sandbox pilot has a customized regulatory regime, with safeguards for financial customers and the availability of tools such as restricted authorisation, individual guidance waivers and no enforcement action letters.
Benefits available for sandbox projects can include
- reduced time to market
- appropriate customer protection safeguards built into their products and services
- better access to finance
‘Regulatory sandbox’ provides further background information, as well defining the eligibility criteria and an application form for ‘cohort’ 3.
‘Regulatory sandbox – cohort 2’ describes the projects from 24 firms that met the eligibility criteria and are ready to begin testing. 7 other firms that were accepted into cohort 2 are not yet ready for testing and may be part of cohort 3.
Firms testing in the second cohort include regional as well as London-based firms and cover a variety of sectors, including wholesale, general insurance, payments, retail banking and retail lending.
Among many novel products and services are
- ‘Canlon’ – an insurance policy that saves a portion of the net premium to reimburse policyholders if a claim is not made
- ‘Evalue’ – an ongoing, fully automated online streamlined advice process designed to help employees in the workplace set and achieve realistic retirement goals
- ‘nViso’ – an online platform providing advisors and clients behavioural assessment profiles generated by artificial intelligence and facial recognition
- ‘Saffe’ – a face recognition payments and authentication service provider
- ‘ZipZap’ – a cross-border money remittance platform that chooses the most efficient means for a payment to reach its destination, including via digital currencies
- ‘FloodFlash’ – event-based flood insurance, even in high-risk areas, with customers receiving a pre-agreed settlement as soon as the company’s sensor detects that flood waters have exceeded a certain depth
- ‘YouToggle’ — an app that uses mobile phone telematics to monitor a user’s driving and creates an individual score that can then be shared with a car insurer to obtain a discount.