The Financial Conduct Authority and the City of London Corporation are piloting a digital sandbox to support firms to develop solutions to the challenges created by the COVID-19 pandemic.

Under the terms of the partnership, the organisations will develop and launch a digital testing environment to provide firms with access to high-quality data sets for the testing and validation of innovative technology solutions.

In the initial pilot stage, the digital sandbox will support large financial institutions and start-ups looking to play a key role in the recovery from coronavirus.

This support will include supplying relevant data sets and expertise in the areas of detecting and preventing fraud and scams, supporting vulnerable customers, and improving access to finance for SMEs financially affected by the pandemic.

The FCA said the pilot marks a further stage in the FCA’s programme to encourage and support innovation in financial services through Innovate, the regulatory sandbox and techsprint programme.

Christopher Woolard, interim chief executive of the Financial Conduct Authority, said:” Innovation is a powerful driver of effective competition and can help to accelerate the development of new solutions to emerging challenges.

He added that the sandbox programme would establish a platform to tackle the challenges that will face the financial services sector in its recovery from Covid-19.

City of London Corporation policy chair Catherine McGuinness said:”The UK has long been a world leader in fintech, fuelled by our innovative spirit, our creative energy, and our regulatory approach. That has borne fruit during this difficult period, during which we’ve seen accelerated demand for digitisation.”

"As we look towards recovery, it’s therefore vital that we continue to support innovation, and this digital testing environment provides us with the opportunity to do just that.”

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