City regulator Nikhil Rathi has claimed that the Financial Conduct Authority (FCA) is working to implement blockchain, API technology and machine learning to quicken compliance checks.
Speaking at the Lord Mayor’s City Banquet at Mansion House, Rathi (pictured) said the FCA expects to hire more data scientists and data analysts and is working with the Bank of England on the Digital Regulatory Reporting Initiative.
He said this initiative involves connecting to firms with blockchain to ensure compliance checks can be completed in near real time.
Rathi said the regulator is working on the initiative because regulatory reports are estimated to cost between £1.5bn to £4bn a year, with 20,000 rules across 58,000 firms.
He said that as the FCA accelerates its goal of becoming a “data and digital first regulator” it has increased investment in its own capabilities, including £120m over three years to maximise its move to the cloud.
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“By connecting to firms through blockchain and API technology and implementing machine readable and executable regulation, compliance checks can be completed in near real time,” said Rathi.
Rathi said through his role at the FCA and as part of The Digital Regulators Cooperation Forum (DRCF), he has met Google often to discuss online safety of retail financial services consumers.
The DRCF is a partnership between the Competition and Markets Authority, the Information Commissioner’s Office and the Office of Communications, which the City regulator joined in April this year. Rathi said the group will soon announce its first chief executive.
“It may surprise you to know the firm that I have met most so far as FCA chief executive is not a purely financial services firm, but is in fact Google, the main topic of discussion being online safety for retail financial services consumers, one of many challenges that requires a joined-up approach, including through the DRCF,” he said.
During the speech, Rathi joked that he once made up policy on the fly during a Zoom mishap in which the audience could not hear Prudential Regulation Authority chief executive Sam Woods.
He also namechecked Kim Kardashian repeatedly, in reference to FCA chairman Charles Randell mentioning her when warning investors to be prepared to lose all their money if they invest in crypto, after she promoted on Instagram a speculative digital token created a month previously by unknown developers.