Bureau continues fintech innovation push

The Consumer Financial Protection Bureau announced a collaboration with 11 financial regulators and related organizations to create the Global Financial Innovation Network.

The Consumer Financial Protection Bureau announced a collaboration with 11 financial regulators and related organizations to create the Global Financial Innovation Network.

The network 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. The collaboration is based on a draft document, available here, on which the bureau invited feedback by Oct. 14.

This move comes on the heels of two recent creations to promote innovation in the financial industry. Acting Director Mick Mulvaney announced a regulatory sandbox for analyzing possible regulation of future fintech innovations and an Office of Innovation subcommittee specifically tasked with creating policies to foster new technology and fintech innovation.

Creation of the GFIN flows from an initial whitepaper on the idea of a ‘global sandbox’ led by the United Kingdom’s Financial Conduct Authority in February 2018. Key themes to emerge in the feedback on the FCA’s initial whitepaper were:

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.

“Joining the Global Financial Innovation Network demonstrates the Bureau’s commitment to promoting innovation by coordinating with state, federal and international regulators,” said CFPB Acting Director Mick Mulvaney. “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.”

In addition to the CFPB and the FCA, the organizations currently involved in the GFIN are: Abu Dhabi Global Markets; Autorité des marchés financiers (Québec); Australian Securities & Investments Commission; Central Bank of Bahrain; Dubai Financial Services Authority; Guernsey Financial Services Commission; Hong Kong Monetary Authority; Monetary Authority of Singapore; Ontario Securities Commission; and Consultative Group to Assist the Poor.