Regulatory Sandbox update: next wave of innovation

Introduced in 2016, the FCA’s Regulatory Sandbox allows firms to test innovative propositions in the market with real consumers.

In August 2021, the Sandbox moved to an 'always open' model and so allowing firms to submit their applications throughout the year rather than at fixed points.  This approach was encouraged in the Kalifa review of UK fintech and firms are now able to access the FCA’s testing services at any point throughout the year, at a time of their choosing.

Since then, the FCA has received 48 applications and has accepted 13 firms. Propositions operate in the retail lending, retail investments and retail banking and payments sector.

The FCA notes that the main type of innovation continues to be dominated by data and technology infrastructure, with firms using AI/machine learning, DLT/blockchain technology, open banking, API, digital ID as well as predictive analytics. 

The list of firms accepted can be found on the FCA’s webpage here.