The Financial Conduct Authority (FCA) released a speech by its chief executive, Nikhil Rathi, titled ‘Navigating the UK’s Digital Regulation Landscape: Where are we headed?’ on April 22, 2024. In his speech, Rathi outlined the FCA’s plans to prioritize oversight of Big Tech, detailed in Feedback Statement FS24/1, which accompanied the speech. Rathi also addressed the FCA’s response to the Government’s White Paper on Artificial Intelligence (AI), released concurrently.
Key Points of the Speech:
- Rathi discussed the FCA’s intention to explore how Big Tech firms’ access to vast data sets could enhance product quality, pricing competitiveness, and options for consumers and businesses. He noted the positive impact of Big Tech on financial services but expressed uncertainty about the future value of their data in financial markets. Depending on the findings, the FCA aims to encourage data sharing through initiatives like Open Banking and Open Finance, or propose regulations via the Competition and Markets Authority (CMA) to address potential risks.
- Rathi emphasized the FCA’s collaborative efforts with the Bank of England (BoE) and the Prudential Regulation Authority on critical third parties and AI. He stressed the importance of industry collaboration through forums like the Digital Regulation Cooperation Forum (DRCF) AI and Digital Hub to ensure a balanced and innovation-supportive regulatory approach.
FS24/1 on Data Asymmetry between Big Tech and Financial Firms:
The FCA summarized responses to its call for input on data asymmetry between Big Tech and financial firms in FS24/1. It outlined four next steps to mitigate risks and foster competition benefits, including ongoing monitoring, collaboration with Big Tech, proposal development, and alignment of incentives for data sharing.
FCA Response to Government White Paper on AI:
The FCA welcomed the Government’s pro-innovation AI strategy and outlined its focus on safe AI adoption and impact assessment on consumers and markets. It plans to monitor AI adoption, review regulatory regimes, collaborate domestically and internationally, test beneficial AI, utilize AI for market surveillance, and research emerging technologies like deepfakes and quantum computing.
Overall, the FCA is committed to navigating the digital regulation landscape, ensuring balanced oversight of Big Tech and responsible AI adoption to support consumer protection, market integrity, and innovation.
Source: dataprotectionreport.com
