The City Week 2023 event came up with some interesting developments in digital assets regulations. Officials from countries like the United States and the United Kingdom participated in the event and shared their views on the current situation and the way ahead. Recently, Emily Shepperd, Chief Cooperative Officer of the Finance Conduct Authority (FCA), shared her views on how better regulation can boost the United Kingdom in becoming a global financial technology (Fintech) hub.
On 26th April, Emily Shepperd delivered a speech at City Week 2023 on how FCA has helped firms in their growth and the way forward to help them in the future. According to Shepherd, regulations can help firms in innovation by setting an entity base on which they can grow. Additionally, she said that the United Kingdom is a favorite destination for fintech companies to make investments in the European region, and globally it comes second after the US. At the City Week 2023 event, the management of digital assets remained a central theme of discussion among its participants.
Emily Shepperd also clarified how blockchain, cryptocurrency, peer-to-peer platforms, smartphones, autonomous smart vehicles, and the birth of the internet challenged centuries-old banking models. In her response to this question Emily said, “Either invent new things or cut costs.” While inventing new technology is a tough task to perform and if you choose a cutting-cost method then it will drag you to the bottom.
She also informed about a third way and cited an example of one Finnish bank, OP, which chose a completely different strategy to innovate its way into the future: it would follow the customer and expand into other services, even those that initially appeared to have nothing to do with banking. Precisely, OP has transformed itself from an entity that sells health insurance to a bank that provides healthcare services. The motive behind giving this example was that there’s no need to completely thrash the existing system, we just need to make it what clients are demanding.
The FCA has also clarified that “we are now at the stage where many want to come within the parameters of existing rules and institutions to grow.” According to the Chief Cooperative Officer of the FCA, till now the FCA was focusing on whether the firms are complying with existing laws related to anti-money laundering laws (AML). Additionally, she said that “we will also be prepared to take action where financial promotions have breached our rules once these rules are in force.”
There are various reasons to believe that the United Kingdom can be a global fintech hub, for example in the last few months they have cracked down on several illegal crypto ATMs installed in the country. Also, heavy fines for misleading advertisements on celebrities have shown their intentions to develop the United Kingdom as a global financial technology hub.
The statement of Emily Shepperd comes ahead of the new consumer duty where she emphasized the FCA’s aim to find out likely harm and to maintain high standards. According to Shepperd, this will help innovators to innovate so that investors can invest with confidence. The new consumer policy will be in effect from 31 July 2023.