The FCA established the sandbox to promote effective competition in the interests of consumers.

The sandbox enables firms to test innovative products, services or business models in a live user environment, while ensuring that appropriate protections are in place.

It opened for applications in June 2016 and has since received 146 sandbox applications.

Fifty were accepted and 41 progressed to testing, which has been run in two cohorts.

•   FCA signs fintech agreement with Hong Kong Insurance Authority
•   FCA authorisation tool for fintech start-ups launches
•   FCA begins advertising campaign for PPI deadline

The report revealed that around 90% of firms that completed testing in the first cohort progressed towards a wider market launch and at least 40% of firms which tested in the first cohort received investment either during or after their sandbox tests.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “The FCA’s regulatory sandbox has been a first for regulators worldwide and we are pleased it has met a genuine demand from innovators. 

“We have seen tests across the full range of sectors that we regulate, and I’m pleased that the majority of firms that have tested products in the sandbox have gone on to take their innovation to market.

“It is important that we continue to evaluate the success of our interventions so that we can identify areas where improvements can be made to help both firms testing and ultimately the consumers they are serving.”