“In the UK, the alternative finance  industry paved  the way for FinTech in a number of ways – most notably in attracting investment capital, rapidly raising a user base, securing supportive legislative change and proactively engaging with the regulator to secure a dedicated regime.

As peer-to-peer and crowdfunding platforms scale and, invariably, make  pivots in their business models and product suites, the need  to test innovations and secure new regulatory permissions remains prominent. In this context, the need for a coordinated regulatory approach – across innovation departments, authorisation and supervision teams as well as those responsible for policy changes is clear.

In particular, the alternative finance  industry can benefit from a neutral space where business model or product changes can be discussed with the regulator in a curated manner before  any formal submissions are made. The focus of such discussion should be the most effective regulatory approach to secure a demonstrable consumer benefit, with a focus on outcome analysis.

A sandbox environment can support such dialogue as well as facilitate outcome projections in a prototyping stage.”

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