The Financial Conduct Authority has unveiled the list of firms that were successful in their applications to begin testing in the third phase of the regulatory sandbox project designed to let firms test out innovative new financial ideas and products.

The FCA says the regulatory sandbox allows businesses to test products, services, business models and delivery mechanisms in a live environment while ensuring that consumers are appropriately protected. It is part of Innovate, an initiative kicked off in 2014 to promote competition in the interest of consumers.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “Since we first opened the sandbox, it has supported almost 70 firms in testing innovative new products and services. It is particularly encouraging that we are now seeing more applicants from outside London and a broader range of firms testing in the sandbox. 

“As we open the application window for our next sandbox cohort, we continue to encourage applications from firms of all sizes and from a wide range of sectors, including sectors we haven’t seen heavily represented in the sandbox to date.”  

The FCA received 61 submissions for the third phase of the regulatory sandbox. 18 applications met the sandbox eligibility criteria and were accepted to develop towards testing. Tests will be conducted on a short-term and small-scale basis and the FCA has worked with the sandbox firms to agree testing parameters, building in consumer safeguards.

The current cohort consists of the firms below:

Barclays Regtech proposition which tracks updates to regulations within the FCA Handbook and aligns their implementation to Barclays’ internal policies.

Barkat Ventures International money transfer platform that enables customers to send healthcare services along with their remittances.

Chynge DLT-based cross-border money remittance system that incorporates a transaction monitoring system which is powered by a virtual, artificial-intelligence compliance bot to tackle money laundering, terrorism financing, and fraud more efficiently.

Curl New consumer payment network designed around open banking APIs, which works via @usernames and direct bank transfers.

Economic Data Sciences Technology solution that utilises artificial intelligence to provide fund managers with a mathematically-defined optimal trade-off among a number of risks and objectives during the investment selection process.

Etherisc Uses smart-contracts on a blockchain to provide fully-automated decentralised flight insurance.

first direct and Bud App which learns customers attributes from transactional and demographic data to identify financial and non-financial products from a marketplace of first direct, HSBC and external institutions.

FutureFlow Transaction monitoring system that monitors the movement of money through the economy by tagging individual units of value in transaction amounts and facilitates the sharing of anonymised information between parties in order to help prevent financial crime.

Nationwide Automated solution providing digital savings guidance and investment advice.

Orca P2P investment aggregation platform that facilitates investment in a diversified portfolio of P2P loans.

reBank Platform that consolidates business bank accounts into one login. Using predictive algorithms, reBank offers businesses the potential to improve the efficiency of their banking tasks and business payments.

ResonanceX New electronic platform that enables end-to-end automation of price discovery, execution and life-cycle management of structured products using centralised or blockchain asset custody.

Sherpa Management Services Insurance solution that offers members one account to set-up and manage multiple insurance risks. Sherpa offer dynamic products which provide the ability to increase and decrease the sum assured as needs change.

Solidi Blockchain based payments platform that uses cryptocurrencies to facilitate money remittance at a faster speed and with lower transaction costs.

Spherical Defence Labs Application Programming Interface (API) security system that detects advanced hacks and breaches in banks powered by deep learning and computational linguistics.

SquareBook New auction method of book-building for initial public offerings/private placements that aims to be fairer and more transparent than existing methodologies.

Wrisk Usage-based contents insurance product with innovative risk scoring method.

Yoti Technology provider that lets users create an encrypted, biometric digital identity linked to their government issued ID. Yoti lets users of the app actively consent to share their verified identity details with financial institutions for use in KYC verification.

The Fourth Sandbox Phase:

The FCA is now accepting applications from firms to be part of the fourth sandbox phase. Firms have until 31 January to submit their applications. The eligibility criteria, application form and instructions on how to apply are available on the FCA website. The FCA says it expects all accepted firms to be ready to begin testing from June 2018.

The financial regulatory body encourages applications from firms of all sizes as seen by the firms accepted into the existing three cohorts, the sandbox is available to large firms, start-ups and everything in between.