Brexit failed to derail the Financial Conduct Authority's fintech sandbox - in fact, it's expanding

Lynsey Barber
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It's full speed ahead for the FCA's fintech sandbox (Source: Getty)

The City watchdog is expanding its scheme to help innovative startups working in the financial sector get to market, saying the vote to leave the EU failed to deter ambitious new companies.

Nearly twice the number of have been accepted as potential members of the second cohort of the Financial Conduct Authority's (FCA) regulatory Sandbox, which helps new companies navigate financial regulation.

And the Brexit vote has failed to deter firms, said Christopher Woolard, executive director of strategy and competition at the FCA.

Read more: The City of London is creating new fintech hub in the Square Mile

"In the immediate aftermath of the EU referendum there was a concern that we would see the number of innovative firms wanting to operate in the UK fall," he said, speaking at the Innovate Finance Global Summit.

"Indeed we did see a dip and it’s worth reflecting on the fact that we live in an uncertain climate and nothing can be taken for granted.

The fact is that in the nine months prior to the referendum, we received 264 requests for support. But in the nine months after the referendum, that figure had increased to 321 requests for support.

The fact is we are working more deeply with innovators than this time last year. For example we received 77 applications for the second cohort of our sandbox, more than applied for cohort one. And I can announce today that we will be accepting 31 of these applications to progress towards testing, nearly double the number of firms currently testing in our first cohort.

The FCA will expand its oversight of robo-advice to include areas such as mortgages, insurance and debt and those offering guidance on financial products.

Read more: London holds on to global fintech lead (but other cities are chasing)

And in addition to building ties with other global fintech hubs, it will look to expand its reach across other cities in the UK.

"We will work with the local authorities, development partners and firms in those locations, as well as the Scottish government and the Treasury's digital envoys. Our aim, as for the wider work we do, will be to encourage the emergence of more innovative firms, whether home-grown or inward investors," said Woolard.

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