Hogan Lovells Accelerates Regulatory Journey With new Tool for FinTechs
3 August 2016
The Regulatory Accelerator addresses challenges that many FinTech companies face when designing and scaling a business by providing information and guidance on the FCA's regulatory regime. It includes resources and tools to help FinTechs determine whether they are conducting regulated activities or issuing financial promotions, and whether they, therefore, need to be an authorised firm or an appointed representative. It also provides information on the FCA application process, what FinTechs will need to demonstrate to the FCA in order to be eligible for authorisation and the key rules that will apply to the business once it becomes authorised.
Hogan Lovells has been at the heart of innovation within the financial services sector for many years, working on a range of developments from the UK's first ever debit card to advising Zopa on the UK's first peer to peer lending platform and Barclays on the launch of Pingit. The firm has helped countless FinTech companies throughout their life-cycles.
Through this work and from insights provided by the firms' Strategic Partnership with Innovate Finance, Hogan Lovells recognised that many FinTechs struggle with common regulatory issues and find engagement with regulatory materials challenging.
In an Innovate Finance survey of members who had recently gone through the authorisation process in Q1 this year members described their difficulty in understanding the complex regulatory and scope, the amount of time, capital and resource they burned, and their uncertainty about the process and whether they needed to be authorised at all.
The Regulatory Accelerator, free to FinTech members of Innovate Finance, seeks to address these issues and accelerate FinTechs along their regulatory journey. On average, FinTechs surveyed by Innovate Finance estimated their cost of getting authorised at approximately £200,000, taking into account both internal resources and external advisers. Hogan Lovells' Regulatory Accelerator should help make it easier, quicker and less expensive for FinTechs to get to market.
Commenting on the Regulatory Accelerator Rachel Kent, Global Head of Hogan Lovells Financial Institutions Sector, said:
"Cost and management time devoted to becoming and being authorised are a major investment for any business. We know that the FCA has gone a long way to help with their Regulatory Accelerator programme but we also know that this is not available for everyone, so we have created our own Regulatory Accelerator tool to address the challenges we see FinTech clients facing on a daily basis. Hogan Lovells is committed to innovation and to supporting and developing the FinTech community in the UK and globally, and we are also assisting Innovate Finance and the FCA to formulate their proposals for the broader Industry Sandbox."
Lawrence Wintermeyer, CEO, Innovate Finance said:
“The Regulatory Accelerator is a platform which will enable Innovate Finance members to access the knowledge needed to navigate FCA regulations to better ensure they are fit for market purpose and FCA regulation, rapidly and cost effectively. Hogan Lovells has created an intuitive and easy to use online solution that enables FinTech start-ups to map out their regulatory requirements to determine if they need to be regulated, right through to requirements for full authorisation."