Speaking at the London Blockchain Week 2017 on 24th January, Guido Branca, CEO of banking start-up BABB, suggested that both the Financial Conduct Authority (FCA) and the Bank of England had made the UK an ideal environment for innovation.

Such is the allure, Guido revealed that his own start-up BABB – a banking platform based on blockchain technology and biometrics – had selected London even ahead of California’s Silicon Valley.

“We actually chose to come to the United Kingdom to open this bank because of the regulators,” Guido insisted.

“We looked around the world – at Europe and most of the United States – to see which regulators would be open to looking at new ways of implementing banking using blockchain, and we found that both the FCA and the Bank of England are taking a very open approach to try [to] understand how things will evolve.

“That means that instead of turning people away when they’re at project level, they will actually engage with them and try to understand what you’re trying to do.”

The FCA has been praised for its dealings with innovation 

Testing the waters

In November, the FCA revealed that 18 firms had been accepted into the first cohort of its regulatory sandbox.

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Launched as part of Project Innovate, the sandbox enables financial start-ups to test new solutions, products and services in a live environment without any potential consequences.

Guido admitted that his own firm was eager to take advantage of this opportunity.

“They [the FCA] got their first cohort through there, and they’re now attempting to start that again for the second cohort.

“We’re trying to be part of that.”

Guido also highlighted the Bank of England’s own fintech accelerator, which was launched in June 2016 with the purpose of helping the central bank to harness new financial innovations.

His comments followed a recent report which suggested that blockchain could cut bank infrastructure costs by on average 30%.

Looking ahead

Last week, the FCA revealed plans to continue promoting fintech within the financial services industry.

Guido explained that this willingness to explore new ideas would keep the UK ahead of the trend.

“My sense is that both the Bank of England and the [FCA] are ahead of the game [compared to] most other regulators.

“They speak a very similar language, they have young people … who are future-minded in understanding what’s happening.

“I think that’s one of the reasons the UK will stay ahead of these things, because the regulators are looking forwards here as opposed to looking backwards.”