BCFP Grows Focus on Innovation with New Global Network
The bureau is seeking feedback on an initiative to develop a network connecting regulators and companies in the financial services industry focused on innovation and new technologies.
8/9/2018 10:30 AM
The Bureau of Consumer Financial Protection is collaborating with financial regulators worldwide to expand its resources allowing financial services firms adopting new technology to interact with regulators.
This week, the bureau announced its initiative to create the Global Financial Innovation Network (GFIN) that “will seek to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. It will also create a new framework for cooperation between financial services regulators on innovation-related topics,” according to a news release.
The BCFP and the other regulators are seeking views on the mission statement for the GFIN, its proposed functions, and where it should focus activity. The group would also welcome hearing from other interested regulators who wish to get involved.
The network will include 11 financial regulators and related organizations with three main proposed functions outlined in a draft document created to seek feedback from stakeholders.
The GFIN will, as proposed:
- Act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models;
- Provide a forum for joint policy work and discussions; and
- Provide firms with an environment in which to trial cross-border solutions.
“The pace of technological change, including the development of emerging technologies and business models in financial services, requires regulatory authorities to adapt to this new landscape and devise new ways of cooperating,” according to the GFIN mission statement. “This is because emerging technologies and business models are presenting regulators with questions around how firms can meet the necessary regulatory requirements, whilst harnessing these tools.”
The bureau, under the leadership of Acting Director Mick Mulvaney, has a new Office of Innovation to focus on encouraging consumer-friendly innovation. The work that was being done under Project Catalyst will be transitioned to this new office. The bureau intends to fulfill its statutory mandate to promote competition, innovation, and consumer access within financial services. To achieve this goal, the new office will focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators, and reviewing outdated or unnecessary regulations, ACA International previously reported.
“Joining the Global Financial Innovation Network demonstrates the bureau’s commitment to promoting innovation by coordinating with state, federal and international regulators,” Mulvaney said in the news release. “We look forward to working closely with other regulatory authorities—whether in the United States or abroad—to facilitate innovation and promote regulatory best practices in consumer financial services.”
The creation of the GFIN is based on feedback on a white paper outlining the idea of a “global sandbox” from the United Kingdom’s Financial Conduct Authority in February, according to the bureau. Feedback from stakeholders, according to the bureau’s news release, included:
- Regulatory cooperation: “Respondents were supportive of the idea of the initiative providing a setting for regulators to collaborate on common challenges or policy questions firms face in different jurisdictions.”
- Speed to market: “Respondents cited one of the main advantages for the global sandbox could be reducing the time it takes to bring ideas to new international markets.”
- Governance: “Feedback highlighted the importance of the project being transparent and fair to those potential firms wishing to apply for cross-border testing.”
- Emerging technologies/business models: “A wide range of topics and subject matters were highlighted in the feedback, particularly those with notable cross-border application. Among issues highlighted were artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings, know your customer and anti-money laundering .”
The draft report on the GFIN collaboration is also available for feedback and questions until Oct. 14, 2019.
In the U.S., interested stakeholders may share feedback directly with the bureau’s Office of Innovation at firstname.lastname@example.org.
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