In 1961 President Kennedy set the challenge of landing a man on the moon by the end of the decade. Several years later, and following various failures, three astronauts were fired off into space and fingers crossed that they would return. It's said that the computer enabling us to land on the moon was as powerful as a 1960s calculator.
Whilst technology and innovation pose risks, there are also benefits to be reaped. This is the message from the FCA and other supervisory bodies across the globe share this view. We see various financial hubs seeking to enhance their global position by embracing technology.
Several decades have passed and technology has advanced and continues to do so at such speed that it’s hard to keep up-to-date. Improved communication is one benefit of these developments, which has resulted in businesses operating globally and sharing huge amounts of information as well as generating copious amounts of data for analysis.
A recent FCA speech at Money 20/20 Europe highlighted how the FCA uses data to become more effective and deliver its regulatory objectives.
When used correctly and responsibly, data and technology can offer faster, more efficient, and more secure services to consumers that empower them to make appropriate choices and protect their personal data.
(Jessica Rusu, FCA Chief Data Information and Intelligence Officer)
In recent years, we’ve seen the FS sector impacted by a global pandemic. The pandemic serves as a reminder that we don’t exist in isolation. Macro events impact our daily lives, not just our business activities. War, climate change and the increasing costs of living require us to adapt to changes in our wider environment. Likewise the regulators are also adapting.
The FCA published its first data strategy in 2013. At that time, it focussed attention and resources on collecting and managing data. Today, the FCA recognises the advances made in technology and looks to leverage these developments. For example, improved technology has helped the FCA to improve its own knowledge and skills. The FCA now scrapes 100,000 websites daily to identify scams and frauds. This is just one way in which the FCA is embracing technology to improve customer outcomes.
As more regulated firms are using advanced technologies, it’s crucial that the regulator understands these changes so it can continue to supervise firms effectively. To aide this understanding, we’ll see the FCA continuing its work on innovation.
The FCA’s data strategy includes a huge investment in technology highlighting its commitment to innovation, whilst also considering how to make regulation less onerous for regulated firms. To achieve this it is investing over £120 million to develop its infrastructure, such as moving to the cloud and looking at data collection and analysis.
Today, we’re seeing how that money is being spent. In her speech, Jessica Rusu advised that the FCA continues to meet its data strategy.
The FCA continues to improve data collection by expanding its data with new sources of intelligence; expanding its innovation services by collaborating with industry and other experts as well as cutting-edge firms.
By improving its data collection and analysis, the FCA hopes to:
Gain a better understanding of the markets and consumer behaviours to shape invention
Identify and respond to problems to intervene when appropriate
Build a flexible, future-ready organisation to react faster to market changes
Whilst the regulator acknowledges the risks posed by technology, it also sees a huge opportunity to improve how it operates. Automating processes helps to improve effectiveness and manage costs, and at the same time enables firms to react and adapt to change in their micro and macro environment.
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Head of Client Regulation| Ruleguard