This week the regulator's focus has been on the opportunities that technology provides to combat financial crime. In the fifth of its kind, the FCA held a TechSprint to bring together financial services firms, developers and subject matter experts to build new products and systems over three days which would help in the fight against money laundering, fraud and other misuse of the financial system. Ashurst was invited by the FCA to take part in the role of subject matter expert.
With keynote speeches from Megan Butler and Christopher Woolard it is clear that this is a subject close to the regulator's heart. Interestingly the focus of the three day event was on collaboration, with teams being mixed to ensure that people worked with others who brought different skills and experience to the table.
Teams had two days to build front and back end prototypes for specific use-cases set by the regulator with the third day earmarked for pitching those ideas in four minutes slots to a panel of judges and invited guests. Such was the interest in the event that regulators from ten other jurisdictions were present as observers to see exactly how the FCA supported new technology being used for traditional problems.
Many of the end results are not far off from being ready to launch to market which, as Nick Cook, head of RegTech and Advanced Analytics at the FCA, correctly noted was a feat that very few institutions could achieve so efficiently in such a short period of time.
These events are not the usual business of the regulator but they show how focused the FCA is on supporting the industry as a whole to innovate and think differently about how things can be done. The FCA clearly identifies the power and potential that technology holds in identifying patterns and behaviours in helping firms comply with the rules (and not just in financial crime).
The TechSprint didn't hope to answer all industry's financial crime compliance problems and some issues, such as those that may arise under PSD2 for example and PISPS and AISPs, were not on the agenda to be tackled. Nor were the issues faced by smaller players discussed, particularly in the payments industry.
But some common problems were addressed, such as how to help firms break the data silos and share suspicious activities without breaching individuals' personal data rights.
There are some really exciting developments out there and with the clear support of the regulator firms can have the confidence to try new ways of approaching their compliance obligations, particularly in AML and Financial Crime. Ashurst was just as excited to be a part of this small glimpse of the future.
