Transcript: The FCA’s evolving approach to technology

Transcript

Conor MacManus:

You can probably apply three different lenses to this. There's probably more, but let's talk about three, the first of which is the FCA's use of technology itself. It receives an enormous amount of data, oversees a huge number of organisations. From a supervisory, analytical perspective, there has to be scope to deploy technology there, data analytics, AI, something that they're already doing, but it's great to see that they are looking to progress that agenda. The other area that is important is the regulation of the use of technology by financial services firms, and the regulators in the UK and the Government have been clear that they are not planning on doing specific regulation, for example on AI, whereas obviously, the EU has taken a slightly different approach through the EU AI Act. So, I think that's welcome. We want a pro-innovation, regulatory framework. But the interesting point is the one that you made around positive towards technology, pro-technology, rather than technology agnostic, which has been the typical approach taken.

I suppose the question is, are they going to be more proactive in the way in which they encourage firms to deploy technology, and what's the best approach from a regulatory perspective to do that? From my perspective, clearly very granular, restrictive rules are not the right approach. But there might be areas where they want to provide some guidance around existing regulatory obligations to encourage firms to have the comfort to be able to deploy technology safely. Then the final point is about the use of technology to reduce the cost of compliance from a regulatory perspective. This is something we're seeing a lot of organisations look at and adopt. Again, AI being a great example of something that can be used to reduce cost, to do things more efficiently and effectively. Anything that the FCA and other regulators can do to encourage that and allow firms to adopt those kinds of technologies, I think would be very beneficial.

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