Strathclyde Business SchoolFinancial Regulation Innovation Lab (FRIL)

 

Innovation Calls

These industry-led calls bring together financial institutions, and innovators to develop solutions to key financial regulatory challenges. It starts with an industry described need and evolves through an open call for action. Solutions are developed through a collaborative programme and selected innovations will receive business support within a collaborative environment that fosters trust, encourages collaboration, and accelerates speed to market. Financial award of up to £50,000 are also available for relevant innovations. 

Innovation Challenges

FRIL will deliver a series of practical innovation challenges. These challenges will bring RegTechs and organisations together to explore innovations responsibly, backed by our unique set of capabilities.

There are three types of challenges enabling different types of engagement and benefits for sponsors. 

  • Single challenge - Working with just your organisation, this challenge focuses on solving a specific challenge facing your business. You will work alongside several successful applicant RegTechs to tailor their product to your business and find the most appropriate solution. 
  • Industry Wide Challenge - Working with other partners, we will collectively collaborate to solve challenges faced across the industry. You will guide FinTechs and RegTechs to develop their solution to the problem and see first-hand the benefits of their product.
  • Emerging Tech Challenge - Working one-on-one with FinTechs and RegTechs you will explore applications of an emerging technology, navigating innovation responsibly, and uncovering potential investments for a competitive advantage.

          Participation in the challenge can unlock several benefits for partners

 

 

 

This innovation call focussed on simplifying compliance and seizing AI opportunities by harnessing opportunities for simplifying regulatory adherence using artificial intelligence (AI). The ambition is to drive efficiencies and savings, while continuing to deliver confident regulatory compliance.  Costs of regulatory compliance currently exceed £8.7bn across the UK and counting.

This innovation  challenge, focused on delivering positive environmental and societal outcomes.   The challenge focusses on the best use of data and identifying new data sources that can help address critical Environmental, Social, and Governance (ESG) questions. It invited innovative enterprises to develop data led solutions and technology enabled  approaches to new ESG regulatory requirements, helping drive responsible  outcomes for people and the environment. 

Working in collaboration with EY, Morgan Stanley, Lloyds Banking Group, HSBC,  Barclays, Phoenix Group, Sopra Steria, Equifax, Virgin Money and abrdn, this  innovation challenge invited innovative companies from across the world to apply, with successful firms potentially eligible for funding of up to £50,000.  

The FCA’s (Financial Conduct Authority) Consumer Duty regulation aims to set higher and clearer standards of consumer protection across financial services and to require firms to put their customers’ needs first.  The regulation is designed to ensure that consumers receive communications they can understand, products and services that meet their needs and offer fair value, and the support they need, when they need it. 

There is a strategic opportunity for emerging technology and data capabilities to strengthen the power of Industry to support these obligations enhancing consumer experiences, improving accessibility, ensuring security and ultimately driving economic growth. 

The FCA have committed to highlight to industry examples of both good practice alongside areas for improvement following the regulation coming into force in July 20231.  Specific areas where innovative solutions could support firms provide better customer outcomes include but are not limited to:

  • Enhanced data capturing, monitoring, analysis and board reporting to allow customer outcomes to be better understood at all levels of organisations.
  • Using a data led approach to identifying and understanding customer vulnerability and then providing appropriate services and support
  • Utilising new controls to avoid harm to customers, and to provide prompt and appropriate support for victims of fraud.
  • Training staff to ensure they are suitable equipped to support complex customers and provide appropriate services

Deeper exploration of these and other relevant topics will be the focus of an industry led innovation programme designed to connect industry challenges with innovative businesses developing new technology and services.

Background/Industry challenges:
  • Regulatory requirements - upcoming PSR requirements will enforce mandatory reimbursement to victims of APP scams up to the value of £415,000, with a 50:50 split between the sending and receiving PSP.
  • Rising costs - it is estimated UK financial institutions spent £38.3 billion on financial crime compliance (FCC) in 2023, up 12% on the previous year and up 32% since 2021, with increasing regulation and regulatory expectations noted as the key driver to rising costs1.
  • Emerging technologies - in addition to the evolving regulatory landscape, the rapid advancement of emerging technologies is accelerating both the perpetration and prevention of financial crimes, posing an increasing challenge to financial crime control functions.
  • Siloed approach across the industry - the criticality of future proofing financial crime controls was highlighted by the ‘Research and Innovation Roadmap’, noting individual institutions do not have the complete picture when searching for patterns in vast amounts of data.

 

Potential exploration topics

Leveraging emerging technologies to drive automation and efficiencies across FCC continues to be a priority for all areas of financial services, with the highest priority being KYC/IDV checks, followed by fraud checks, AML screening and monitoring2.  The use cases would underpin a program of industry and fintech collaboration, with the aim to de-risk the proof-of-concept stages for fintech's as they seek to develop their propositions with industry engagement and insight.

Contact FRIL

mark.cummins@strath.ac.uk

 

Address

Strathclyde Business School
University of Strathclyde
199 Cathedral Street
Glasgow
G4 0QU

Triple accredited

 
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