FCA receives flood of applications for Project Innovate support- almost 300 submitted
– Reflects high levels of innovation across UK financial services sector
– Question over FCA’s ability to deal with volume of applications
Project Innovate, which was set up by the FCA in October 2014 to assist firms with the approval of innovative financial products and services, has now received 277 applications for support*, reflecting strong levels of innovation across the UK financial services sector says Bovill, the specialist financial services regulatory consultancy.
Bovill explains that Project Innovate aims to encourage competition through ‘disruptive innovation’; it looks to support firms which challenge existing business models and offer new, cutting-edge services. The Project helps these businesses navigate the regulatory framework and assists with preparation for authorisation.
Bovill say that the high number of applications reflects the willingness of UK financial services firms to depart from traditional methods and is a positive indication of their readiness to work closely and co-operate with the regulator.
Bovill adds that 91 firms have had their application accepted and have received or are now receiving support under the Project. One firm has been authorised following assistance.**
Gillian Roche-Saunders, head of venture finance at Bovill, said: “The surge of applications is encouraging. Innovation in finance is paramount to ensuring the UK remains competitive and the fact that so many firms are engaging with the FCA is a good sign.
“The regulatory framework and procedures here in the UK can be a little daunting, especially for smaller firms, so it is great that access to FCA support and guidance has been improved.”
Bovill said that the low authorisation rate could, however, signal that the FCA is struggling with the workload generated by a high volume of applications. Increased resources may be needed to ensure all applications are efficiently processed and support received in a timely manner.
Gillian said: “There is still some progress to be made. So few full authorisations does raise some questions about how well the FCA is dealing with the number of applications received.
“The reach of the scheme also seems to be fairly limited to new and smaller companies at present- Project Innovate is useful where there is no traditional route to market. The FCA now needs to ensure that support reaches more larger and established firms looking to innovate, as well as more non-UK based businesses.”
To qualify for support under Project Innovate, businesses need to demonstrate that their service or product represents ‘genuine innovation’, will benefit consumers and has been adequately researched and developed.
Support offered under Project Innovate currently includes:
– Assistance with understanding the regulatory framework and how it applies to new concepts/business models
– Help with preparing and making an application for authorisation
– A dedicated contact for up to a year after an innovator business is authorised
From October 2015:
– Businesses which have received initial support under the Project will have their application for authorisation go through a specialist Project Innovate authorisation process- to minimise any delays.