Regtech is still the "sleeping giant" of the financial services world, according to FCA director of innovation Nick Cook.
Speaking at the CDO Exchange event on Wednesday (6 November), Cook said that while it is certainly growing, regtech is still a key "underserviced" area of the Financial Conduct Authority's (FCA) so-called 'regulatory sandbox.'
The sandbox allows businesses to test propositions in the market and applications are currently open for cohort six until 31 December.
In his talk, Cook said regtech - the use of new technology to facilitate regulatory requirements - is "another area where we have to think if the services we currently offer marry up to the needs of the firms".
One reason for this, he explained, was the length of sales cycles and complexity of information technology systems in larger institutions who are potentially significant consumers of regtech.
The director of innovation said one area where firms have difficulty is being able to demonstrate to customers that their solutions not only work but provide a more efficient and effective way of doing things.
He said the FCA was looking at ways to better support regtech solutions through the creation of a "digital sandbox" where focused proofs of concepts could be tested and then demonstrated to the industry.
Cook said this has already had "great engagement" from regtech firms. Therefore, he said exploring a data-rich testing environment is something worth pursuing.
"One of the things we are currently looking at and beginning conversations around is what that digital testing environment might need to look like," he said. "What role we ought to play in supporting its creation, and whether it could be something that could be scaled across jurisdictions."
Staff are your responsibility
More than 4,500 retail investors affected
Paid out £54m in related compensation
Changes to take place by next year