The Financial Conduct Authority (FCA) has announced the eight FinTechs under consideration to test cross-border innovations as part of a joint global regulatory sandbox.

In a speech to the Innovate Finance Global summit this morning, the FCA’s executive director of strategy and competition Christopher Woolard, said it would be joining forces with fellow banking regulators to launch the first tests overseen by the Global Financial Innovation Network (GFIN).

Founded in 2014, the GFIN is a group of regulators working together to test new propositions across 12 jurisdictions.

Woolard said that the GFIN is considering eight FinTech firms to test cross-border propositions across 35 organisations in 12 different jurisdictions. These include, Onfido, Tradle, Ascent RegTech and Starling Trust - which is already testing with the FCA.

“These are propositions that are not just tinkering around the edges of the status quo, but have the potential to fundamentally change how things are done,” he commented. “Propositions that are taking on known cross-border issues, like trade and consumer access, and offer the possibility of real gains for society.”

He also said that a new report evaluating the FCA’s Innovate strategy, five years after it was launched in 2014, found that more than 1,500 firms have requested support from Innovate, with financial services firms engaging with the programme coming to market 40 per cent faster than average.

In total, nearly 700 firms have received assistance from the FCA’s innovation scheme. In addition, around 80 per cent of the 47 firms to have completed sandbox testing are now operating in the market with necessary authorisation, while 63 others are in the pipeline.

Of the 44 start-ups that tested in the first three sandbox cohorts, almost half either received additional investment or were acquired during or after their test.

Woolard said the number of established FinTechs and major financial institution using Innovate to launch services - such as mass-market robo advice - was increasing, as were the number of partnerships between incumbent and their more nimble FinTech counterparts.

“We have seen the entry of smaller firms prompt larger players to introduce their own innovative services, for example in insurance,” he noted, adding that the FCA was investing more time and resources into moving its own regulatory innovation in house, highlighting the cost of financial crime to businesses and economies at large.

“New technologies offer the potential to tackle this threat and seriously curtail the ability of criminals to take advantage of our financial system,” Woolard said, reflecting that a recent TechSprint event on financial crime demonstrated that “all too often, vital data and knowledge remains siloed within institutions, resulting in a global problem being tackled at an individual level”.

However, despite the move towards further cross-border collaboration and FinTech partnerships, Woolard said that “no one is claiming things are perfect”, suggesting that the Innovate evaluation report had flagged many areas for improvement.

He concluded that the challenges facing the FCA and other regulators are global in nature. “They range from the environment, to trade, to crime - these challenges will require creativity and vision to overcome - but that also means we continue to see opportunities.”

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