Why was the Global Financial Innovation Network (GFIN) set up?It’s a recognition from a number of regulators – led by the FCA and including ourselves and others – that we need to share our experiences in terms of the technological innovations in our respective markets. There also needs to be a way to help innovating firms ensure they have an environment in which they can operate with more certainty as to how each of the relevant jurisdictions will be treating them.
What is it seeking to achieve?First, as I mentioned, is to share our experiences as innovations come into each of our markets and collaborate on how we respond to those innovations. Second is to work together on areas such as regtech to provide certainty for firms around how they’re likely to be treated when approaching each jurisdiction.
Finally, we want to provide an environment in which innovations can be trialled across different jurisdictions at the same time. This means firms won’t have to apply to trial a solution in just one market and then roll it out. That should aid them with their innovation as they drive it forward.
What types of innovation will GFIN focus on?Financial services. It could be using technology to drive innovation in a company’s business model or the product itself. Very often, innovation simply involves a different way of approaching something that we’re already used to in financial services businesses.
GFIN is launching a six-month pilot on cross-border testing of innovative solutions. Tell us more about this. Applications for the pilot closed at the end of February. Once we have a good idea of who is interested in the pilot and which jurisdictions they’re interested in doing the testing within, we’ll establish how to proceed.
Currently, we’re learning about how each jurisdiction would run such trials. We’ll need to iron out any differences which might be barriers to firms running trials across different jurisdictions at the same time.
That will be the next piece of work, which will happen through March alongside selecting and speaking to the firms that will be involved in the pilot, which will run for six months from April.
How will GFIN cooperate on regulation?We’re not looking to influence or establish any other jurisdiction’s approach to innovation. It’s about sharing experiences and understanding how others have approached it within the boundaries of their own legislation and learning lessons from that. The key to it all is making sure that everyone’s welcome to join GFIN from the regulatory world and that there are opportunities for everybody to share and learn from each other.
How will the network help to increase speed to market for innovative firms?About the expert
Emma Bailey joined the Guernsey Financial Services Commission in 2002 and was appointed director of its Authorisations and Innovation Division in September 2018. She is a member of the CISI and an associate of the Institute of Chartered Secretaries and Administrators.Cross-border trials should give firms insight into how their product or service might operate in different markets much quicker. I can also imagine that some of the meetings that they might have with one regulator will actually now happen with several. So, if you’re going in to meet your host regulator, there could be other regulators on the phone as well listening to your pitch. Simple things like that will help to speed things up.
There will be issues of confidentiality that we are still working through, but we’re hoping that being more coordinated and allowing economies of scale and speed in what seem like quite minor areas will help a great deal overall.
What is the main benefit that firms will gain from the existence of GFIN?Having a group of regulators that are prepared to talk to each other and have a more joined-up approach. The feedback that network members have had from their markets is that firms are pleased to see that we’re willing to collaborate so that they don’t keep having to explain themselves every time they look to expand into a different jurisdiction.
What does the GFIN initiative mean for CISI members and how can they participate in it?CISI members, through the firms they represent, are welcome to participate in the cross-border trials, particularly as their clients are likely to be demanding faster and more efficient interactions with those businesses that are providing financial services to them. In meeting those demands, businesses will want to be considering innovative ways of doing things better, and hopefully GFIN will help to encourage this behaviour.
What’s the plan after the six-month pilot?Hopefully, a successful pilot will mean that we have some entities that are able to go ahead and operate in jurisdictions and I would imagine that the pilot then is rolled out into a more formal approach to undertaking cross-border trials in future.
This article was originally published in the Q1 2019 print edition of The Review. All members, excluding student members, are eligible to receive the quarterly print edition of the magazine. Members can opt in to receive the print edition by logging in to MyCISI, clicking on My account, then clicking the Communications tab and selecting ‘Yes’.
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