Dan Moore, head of strategy, analysis and engagement at the PSR explains how, as we become part of FCA, we are keeping our focus on innovation.
Innovation is rightly a big focus across the payments ecosystem: for businesses delivering new services, for the government which called it out as a key pillar of the National Payments Vision and reinforced its importance in its announcements on consolidating the PSR mainly into the FCA, and for regulators.
In our strategy update, we highlighted our increased focus on it, and in our letter to the Prime Minister on how it can support growth.
In its own letter to the Prime Minister and in public speeches, the FCA has also highlighted the importance of innovation for financial services and has committed to "supporting growth, by enabling investment, innovation and ensuring the continued competitiveness of our world-leading financial services.”
Over the coming months, as part of our continuing work programme in the period before we become part of the FCA, we want to talk to innovators to gain insights into barriers and enablers to innovation, and act as a contact point for innovators seeking advice or guidance on issues relating to payment systems.
The payments industry is experiencing rapid innovation. New digital assets, such as stablecoins, have the potential to reshape payment systems.
Digital money and payments are highlighting the changing relationship between consumers and technology. AI is playing a significant role, whether it is in fraud detection and prevention, in personalisation, or in enabling creative content and capabilities.
We want to understand the implications of these advances and ensure they pave the way for a more secure, efficient, competitive and inclusive payments ecosystem (I also noted this in a recent blog on the changing payment landscape).
Our areas of focus
We strongly believe in supporting the right conditions for innovation to thrive. Here’s how we’re doing this, working closely with the FCA:
- Understanding more about innovation enablers and barriers in payment systems
Over the coming months, we’ll continue to talk to innovators to gather insights on what enables or hinders innovation in payment systems. This includes in relation to current infrastructure (linking to our work with other authorities on the National Payments Vision), scheme rules and operations, and market incentives. - A space to support and steer innovators
We’re here to support you where it’s in our remit. Whether you’re developing new potential payment systems, or payment products that use existing payments systems or where the systems are impacting innovation. We’ll work with FCA Innovation, providing clarity and steers on how your innovations align with our regulatory goals. We’ll continue to contribute our expertise in FCA-led initiatives, such as supporting firms through the regulatory and digital sandboxes, collaborating through Sprints, considering joint initiatives, and hosting roundtables with the fintech community. More information can be found on the FCA Innovation webpage. We’ve launched a dedicated contact point for all innovation-related queries on payment systems, so reach out to us at innovation@psr.org.uk to see how we can support you. - Improving outcomes and supporting economic growth
We’re committed to proportionate regulation and assessing the impact of our approach on innovation. We’ll focus on our role as an economic regulator in promoting innovation to improve outcomes and support economic growth.
We believe this focus – and close collaboration with the FCA – will help in driving and maintaining the conditions for innovation in the UK payments ecosystem to thrive, supporting economic growth, and ensuring that the UK remains at the forefront of payment systems development.
What’s next?
Are you working on something innovative in payments system? Reach out to us at innovation@psr.org.uk to see how we can support you, working with the FCA.
Find out more about the FCA Innovation and how to apply.