Friday, October 20, 2017 12.12PM / News
Financial Conduct Authority (FCA) has today published a
report outlining how the regulatory sandbox (sandbox) has met
its objectives over the first year of operation.
The sandbox was
established to support the FCA’s objective of promoting effective competition
in the interests of consumers.
sandbox enables firms to test innovative products, services or business models
in a live user environment, while ensuring that appropriate protections are in
for applications in June 2016. Since then, the FCA has received
146 sandbox applications. Of these, 50 were accepted and 41 progressed to
testing which has been run in two cohorts.
report sets out the sandbox’s overall impact on the market including
the adoption of new technologies, increasing access and improving experiences
for vulnerable consumers as well as lessons learnt from individual tests
that have been, or are being, conducted as part of the sandbox.
set out in the report show that the benefits include reducing the time and cost
for firms of getting innovative ideas to market.
key benefits of the sandbox are:
The sandbox has helped reduce the
time and cost of getting innovative ideas to market
90% of firms that completed testing in the first cohort
have progressed towards a wider market launch.
Testing in the sandbox
has helped facilitate access to finance for innovators
in the sandbox can help firms access
funding by providing more certainty to prospective partners and
investors. At least 40% of firms which tested in the first
cohort of the sandbox received investment either during or
following their sandbox tests.
The sandbox has enabled products to
be tested and introduced to the market
Firms have used sandbox
tests to assess commercial viability and how receptive consumers are to
pricing strategies, communication channels, business models and the
report also highlights some of the challenges faced by firms in
conducting their tests within the sandbox. These
include accessing banking services and smaller firms struggling to
acquire customers to take part in their tests.
Woolard, Executive Director of Strategy and Competition at the FCA, said: “The
FCA’s Regulatory Sandbox has been a first for regulators worldwide and we are
pleased it has met a genuine demand from innovators.
have seen tests across the full range of sectors that we regulate and I’m
pleased that the majority of firms that have tested products in the sandbox
have gone on to take their innovation to market.
is important that we continue to evaluate the success of our
interventions so that we can identify areas where improvements
can be made to help both firms testing and ultimately the consumers they are
is too early to draw conclusions on the overall impact of the
sandbox however the first year of operation provides an early
indication that the sandbox has been successful in meeting its overall
objective and is providing the market with the benefits the FCA set
out for it.
FCA will use the insights outlined in the report to inform future
sandbox developments and will continue to feed them into its broader
regulatory work, including policymaking and supervisory activities.
sandbox lessons learned report.
1 April 2013, the FCA became responsible for the conduct supervision
of all regulated financial firms and the prudential supervision of those not
supervised by the Prudential Regulation Authority (PRA).
FCA has an overarching strategic objective of ensuring the relevant markets
function well. To support this it has three operational objectives: to secure an
appropriate degree of protection for consumers; to protect and enhance the
integrity of the UK financial system; and to promote effective competition in
the interests of consumers.
out more information about the FCA.