Could the FCA’s latest tech blog deliver confidence boost potential for AI in financial services ?

The FCA has just posted a blog about the work that it is doing with other regulators to clarify the regulatory landscape and enable firms to ‘innovate confidently’. Could the news contained in this blog help to remove the current blockers around uncertainty and novelty for financial services firms?

Positivity

The tone of the blog is positive. Key inter-related themes are:

• the need for regulation to enable innovation by providing firms with regulatory clarity and certainty;
• the potential for regulatory clarity to be a driver of impactful change;
• the need for collaboration between the different relevant regulators; and
• the need to drive-up confidence levels for firms to enable them to be brave enough to innovate successfully.

What does good look like?

The FCA has listened to what firms are asking for and has now recognised that this includes:

• ‘clearer examples of ’what good looks like' in practice'; and
• ‘more opportunities for engagement to build confidence in trying new technologies’.

Statutory code of practice

The FCA states that it ‘will be developing a statutory code of practice’ for firms developing or deploying AI and/or automated decision-making. Expect close collaboration between the FCA and the ICO in the space where data protection and financial regulation are intrinsically linked and where firms have reported navigational difficulties.

Develop, test and evaluate

The FCA also shows commitment to helping more firms to experiment with AI as part of its AI LAB. 

Smaller firm focus

The FCA has recognised that smaller firms may need more support and plans to hold a tailored roundtable with smaller firms later in the year. 

Help and support currently available

The FCA reminds firms about the tools that it has already made available as part of its Innovation Hub including the Digital and Supercharged sandboxes and AI Live Testing. We wrote about the FCA's AI Live Testing in a previous article which also touches on these other support facilities that are available to firms looking to try new things out. 

Regulatory focus

If you would like to discuss how current or future regulations impact what you do with AI, please contact me, Tom Whittaker, or Martin Cook. You can meet our financial services experts here and our technology experts here.

You can read more thought-leadership like this by subscribing to our monthly financial services regulation update by clicking here and clicking here for our AI blog and here for our AI newsletter. 

innovation only succeeds when it’s underpinned by confidence to try new ideas, trust, and a joined-up regulatory approach even where it is challenging to provide clarity with the frontiers of technology moving fast

https://www.fca.org.uk/news/blogs/tech-trust-and-teamwork