UK regulator reveals second wave of sandbox start-ups

FCA is also calling for third wave – details below

The UK’s Financial Conduct Authority (FCA) has unveiled the second wave of firms that have made it into its regulatory sandbox.

As reported in 2015, the sandbox allows businesses to test out new products and services without “incurring the normal regulatory consequences”. The move is part of the FCA’s Project Innovate, which aims to boost competition and growth in financial services.

The FCA received 77 submissions for the second phase, more than applied for cohort one. 31 applications met the eligibility criteria and were accepted. The current cohort consists of the 24 firms that are ready to begin testing shortly. Tests will be conducted on a short-term and small-scale basis. In addition to the firms below, seven firms were not ready to begin testing and may be part of cohort three.

The range of ideas include payments, retail banking and retail lending. The firms are:

• AssetVault – Provides catalogue of assets in an online register.
• Assure Hedge – Web-based platform offering foreign exchange (FX) options to assist SMEs.
• Beekin – Uses artificial intelligence (AI) and data sharing for alternative assets.
• BlockEx – Lifecycle management platform based on distributed ledger technology (DLT).
• Canlon – Insurance policy that saves portion of net premium if a claim is not made.
• Disberse – Blockchain-based service provider for “humanitarian finance”.
• Evalue – Automated online advice for retirement goals.
• Experian – Mortgage eligibility tool.
• FloodFlash – Provides event-based flood insurance.
• Insure A Thing – Offers alternative insurance business model.
• Money Dashboard – Provides view of consumer affordability by aggregating transactions.
• Moneyhub Enterprise – Combines AI and data analytics for financial advice.
• Nimbla – Trade credit insurance and invoice management tools to UK SMEs.
• Nivaura – Administration of financial assets through centralised system or blockchain infrastructure.
• Nuggets – Blockchain app for a single biometric tool for login, payment and identity verification.
• nViso – Online platform providing behavioural assessment profiles by AI and facial recognition.
• OKLink – Money remittance service using cross-border blockchain settlement system.
• Oraclize – DLT-based e-money platform.
• Paylinko – DLT-based payments solution to send and receive payments using a link.
• Sabstone – Blockchain-based platform for early payments from clients against their invoices.
• Saffe – Face recognition payments and authentication service provider.
• Systemsync – Employee benefits comparison platform for SMEs.
• YouToggle – Monitoring app for car insurance discounts.
• ZipZap – Cross-border money remittance platform.

Phase one and three

In cohort one of the sandbox, 24 firms were accepted out of 69 applications and 18 firms had testing plans approved in October 2016. The six month testing window has now closed and firms are submitting final reports, which will be reviewed before the firms move out of the sandbox. The FCA expects most firms to take forward their ideas to market.

It is now accepting applications for the third phase. Firms have until 31 July 2017 to apply and you can do that here.