The newly launched “Innovation Hub” – a part of Project Innovate – is designed to stimulate competition and thus growth within the financial services space. The Hub will serve as a support structure for early-stage products that stand a genuine chance of improving financial services for consumers. Crucially, the Innovation Hub will lend support to both regulated and unregulated entities – and indeed it could serve as a useful guide on the path to regulatory approval.
The FCA’s Chief Executive, Martin Wheatley, explained:
“The Innovation Hub is part of our commitment to support innovation by opening doors to those – regulated and not – who come with fresh ideas about how to deliver financial services.
“This work levels the playing field by giving all firms eager to innovate access to our expertise so that the process of joining the financial markets or introducing new products does not seem so daunting.”
From a practical perspective, the Innovation Hub provides a dedicated point of contact for innovation-related queries. The Hub can offer additional support to businesses for up to a year after authorisation. As discussed, it will also help businesses to work through the complexities of the regulatory framework.
Most promisingly, the FCA has indicated that this new initiative will be instrumental in identifying aspects of the regulatory regime that may need tweaking in order to support innovation. By working closely with companies at the forefront of financial evolution, the FCA hopes to be able to more suitably structure future policy.
That will be music to the ears of many cutting-edge, fledgling platforms. The FCA’s supervision of the industry has met with mixed opinions in the past – but the Innovation Hub appears to represent a commitment to safeguarding the promising future of the alternative finance space.