The UK's Financial Conduct Authority has released its annual Sector Views report that identifies technology as one of the key drivers of change in financial services.
The country's financial watchdog is known for its fintech-friendly and innovative approach when it comes to regulating the industry, which is reflected in this report. However, it also shows that there are still a number of concerns when it comes to new entrants in the space.
Open Banking and PSD2 regulations are strengthening consumer data security, though not all new entrants are fully equipped with the proper data protections. Many banks and conventional financial institutions are working closely with emerging fintechs to implement Open Banking and PSD2 regulations, which aim to improve consumer data rights and online security as well as boost competition in the industry.
To ease the concerns of the FCA, fintechs should double down on security efforts when connecting with a wealth of consumer data via Open Banking APIs that could leave users vulnerable in the event of a cyberattack. To address this concern, new entrants should ensure that they educate consumers in a transparent way about whether and how their money is being protected, says the FCA.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now