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|New Bank Entry Regulatory Support Aligns with Entrepreneurial Spirit and Digitisation|
|Friday, 22 January 2016|
In a move designed to enhance competition in the banking sector, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have come together to launch a new unit dedicated to making is easier for new banks to get off the ground, the New Bank Start-Up Unit.Reflecting on what it sees as an important signal of intent as well as action by the UK’s key financial regulators, James Powell, Executive Vice President at specialist financial software provider Sword Apak observes: “Since Metro Bank became the UK’s first new bank for 150 years when it launched in 2010, there has been a steady trickle of new bank entrants, with 13 new banks joining the market since April 2013. This latest move is a clear signal that the UK’s financial regulators want to help increase the number of new players to enhance both competition and innovation by harnessing the emerging technologies and entrepreneurial spirit that are gaining increasing momentum in the fintech sector.” Technology in all its forms is having a significant impact across all business areas. Even modestly sized organisations can play on the global stage of business and the banking sector is certainly not immune to this change. In banking, one of the key challenges for potential entrants is plotting a path through the regulatory environment. At the same time, regulators are working hard to navigate how to accommodate the emerging technology, tools and consumer usage approaches that digital banking can offer. This new unit stands to be a two-way benefit. Powell reflects: “Parts of the current banking regulation were designed in an analogue environment. What is evident is that this latest move and through other areas of industry engagement, our regulators are working hard to embrace the impact of digitisation. Day-to-day consumer banking has moved online, accessed through smartphones and tablets. In this new world, even simple areas of regulation, such as how to display a representative loan example in a compliant manner, come up for serious debate. Through our own banking software development process, we know the regulators want to embrace the new technologies that enhance customer centricity. This latest move has the potential to be an additional platform to bring innovation, digitisation and financial regulation together.”
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