Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
The UK’s PRA Commitment to International Competitiveness and Growth
Regulatory Insights | Sep 21, 2023
Image: Vicky Saporta, Executive Director, Prudential Policy Directorate at the Bank of England
A recent speech by Victoria Saporta at the Bank of England conference sheds light on the Prudential Regulation Authority's (PRA) vision and its commitment to bolstering the UK's position as a global financial hub focusing on international competitiveness and growth.
- Victoria Saporta, Executive Director, Prudential Policy highlighted the PRA's new secondary objective, which emphasizes facilitating the UK economy's international competitiveness and growth over the medium to long term. This objective aligns with international standards, ensuring that the UK remains a key player on the global stage.
- The PRA's approach to this objective isn't entirely new. They initiated a conversation about a year ago with a Discussion Paper that outlined their policy approach. Saporta's speech in February further solidified the PRA's stance, proposing regulatory foundations that would guide their approach.
Three Pillars of Competitiveness and Growth
See: Canada’s Competition Problem: 7 Reasons
Saporta outlined three main foundations that the PRA believes are crucial for harnessing the UK’s strengths:
- Trust: A strong emphasis on maintaining trust in the PRA and the UK's prudential framework.
- Effective Processes: The need for streamlined regulatory processes and proactive engagement.
- Responsiveness: A commitment to addressing UK-specific risks and opportunities head-on.
A pilot survey conducted by the PRA provided valuable feedback from stakeholders. A whopping 93% of respondents expressed trust in the PRA’s framework, and a similar percentage appreciated the PRA's stable and predictable regulatory environment.
Operational efficiency stands as a key area of focus for the PRA. The authority is taking steps to enhance transparency, with initiatives like more frequent reporting on regulatory transactions.
What Can Canadian Regulators Learn?
Canadian regulators, like their counterparts worldwide, are constantly seeking ways to enhance their regulatory frameworks, ensure financial stability, and foster economic growth. Drawing from the insights of Victoria Saporta's speech at the Bank of England conference and the PRA's approach, here are a few select lessons Canadian regulators can learn:
See: NCFA Response to FINTRAC’s ‘Knee Jerk’ Regulations Requiring Donation Crowdfunding Platforms to Register and Comply with AML/ATF Legislation
1. Embrace a Clear Vision with Defined Objectives
The PRA's new secondary objective emphasizes facilitating international competitiveness and growth. Canadian regulators can similarly define clear, actionable objectives that align with both domestic needs and global standards. These should be S.M.A.R.T goals with measurable outcomes with performance updates being regularly communicated to industry and the public in a transparent and timely manner.
2. Streamline Regulatory Processes and Agility
Operational efficiency is crucial for a responsive regulatory environment. By simplifying processes, adopting technology, and ensuring transparency, Canadian regulators can make it easier for institutions to comply with regulations and for consumers to understand their rights.
3. Engage with Stakeholders
The PRA's pilot survey is a testament to the importance of stakeholder feedback. Canadian regulators can benefit from regular engagement with industry participants, consumers, and other stakeholders to gather insights and refine their approach.
4. Collaborate Across Regulatory Bodies
Financial regulation often involves multiple agencies and bodies. By fostering collaboration and coordination among these entities, Canadian regulators can ensure a holistic and consistent approach to financial oversight rather than create political headwinds or inefficiencies.
Conclusion
Victoria Saporta's enlightening speech at the Bank of England conference underscores the PRA's unwavering commitment to fortifying the UK's stature in the global financial arena. By emphasizing trust, operational efficiency, and responsiveness, the PRA sets a gold standard for regulatory frameworks. The insights gleaned offer invaluable lessons, not just for the UK but for global counterparts like Canada.
See: March 1, 2019: NCFA Submission to the Ontario Securities Commission on Regulatory Burden
As the financial landscape continues to evolve, the principles of clear vision, streamlined processes, engage with stakeholders, and inter-agency collaboration remain paramount. These guiding tenets, as highlighted by Saporta, serve as a beacon for regulators worldwide, ensuring that financial systems are robust, transparent, and in tune with the needs of the times.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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