PEER-TO-PEER investment platform Orca is one of 18 firms that have been accepted into the third phase of the Financial Conduct Authority’s (FCA) regulatory sandbox scheme.
The scheme lets firms test new products, services and business models in a live market environment to help foster innovation in financial services.
The FCA received 61 submissions for the third phase of the scheme, of which 18 met the eligibility criteria and were accepted to move towards testing.
One of the successful applicants is Orca, which is developing an intelligent peer-to-peer investment platform which lets users diversify across multiple P2P platforms, lending sub-sectors and borrowers.
Another is “first direct and Bud”, an app which learns customers’ attributes from transactional and demographic data to identify products from a marketplace of first direct, HSBC and external institutions.
Bud, which tested in the sandbox’s first cohort, has also been adopted by P2P lenders including Zopa and RateSetter.
Other accepted propositions are from firms in the blockchain, regtech and general insurance fields.
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Since the FCA launched the sandbox in June 2016, almost 70 firms have been accepted into the scheme.
In the sandbox’s first phase, only 25 per cent of firms were located outside London. This figure increased to 35 per cent in the second phase and over 40 per cent in the third phase.
The FCA is accepting applications for the fourth sandbox phase until 31 January 2018.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “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.”
In October, the City regulator revealed that three quarters of the firms accepted into the first phase had successfully completed testing and, of those, 90 per cent were continuing towards a wider market launch.
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