Use FCA innovation services to test and launch fintech products

FCA innovation support services

The FCA's innovation team has supported over 800 firms since 2016. Around 90% of firms that complete sandbox testing successfully exit to full authorisation.

Choosing the right service

The FCA offers different services depending on where you are in your journey:

• Early stage (idea/prototype): Use the Digital Sandbox or Innovation Hub for guidance
• Ready to test with customers: Apply for the Regulatory Sandbox
• Ready for authorisation: Use Innovation Pathways for pre-application support
• Scaling an existing business: Use Scalebox for support with growth

Regulatory Sandbox

The Regulatory Sandbox allows you to test innovative products with real customers in a controlled environment with FCA support. It's not a shortcut to avoid regulation - you still need appropriate authorisation. Instead, it provides regulatory certainty and support during testing.

What happens in the sandbox

During a typical 3-6 month sandbox test:

• You receive a restricted authorisation or modification allowing your specific test
• You test with a limited number of real customers
• You report regularly to the FCA on progress and issues
• You work with an FCA case officer who understands your proposition
• You may have modified requirements (e.g., reduced capital) during testing

After testing, most firms apply for full authorisation using evidence from their sandbox test. The FCA's familiarity with your business typically speeds up the authorisation process.

What the sandbox is not

The sandbox is not:

• A way to avoid regulation entirely
• A guarantee of eventual authorisation
• Suitable for established products or services
• Open to firms without a developed proposition ready to test

Digital Sandbox

The Digital Sandbox is a permanent, always-open testing environment using synthetic data. Unlike the Regulatory Sandbox, you don't need live customers or restricted authorisation - you can test your technology at any time.

When to use the Digital Sandbox

The Digital Sandbox is ideal if you:

• Want to test technology before involving real customers
• Need to demonstrate your product to investors
• Are refining your proposition before applying for the Regulatory Sandbox
• Want to experiment without regulatory commitments

It provides access to synthetic data sets that mirror real financial data, allowing you to test algorithms, integrations, and processes.

Innovation Pathways

Innovation Pathways provides pre-application support for firms seeking authorisation. The FCA works with you before you submit your formal application to help you understand requirements and prepare a stronger application.

Benefits of Innovation Pathways:

• Dedicated FCA contact during preparation
• Clarity on which permissions you need
• Guidance on threshold conditions specific to your business
• Reduced risk of application delays or rejection
• Typically faster authorisation once you do apply

Innovation Pathways is particularly valuable for novel business models where the regulatory treatment is unclear. The FCA case officer can help you understand how existing rules apply to your specific proposition.

When you need full authorisation

Innovation services are support programmes - they don't replace the need for appropriate authorisation. If you conduct regulated activities without authorisation or an exemption, you commit a criminal offence.

Timelines for fintech firms

Authorisation timelines vary significantly based on your activities and application quality. Using innovation services can reduce these timelines by helping you prepare a stronger application.

Improving your timeline

To reduce authorisation time:

• Use Innovation Pathways - Pre-application engagement reduces queries and rejections
• Submit a complete application - Incomplete applications cause the most delays
• Respond to FCA queries promptly - Slow responses extend timelines significantly
• Have SM&CR individuals ready - Senior manager approvals run in parallel with firm authorisation
• Prepare all policies and procedures - Don't submit drafts or placeholders

Global Financial Innovation Network (GFIN)

If you plan to operate in multiple countries, the FCA participates in GFIN - a network of regulators offering coordinated support for cross-border innovation testing.

GFIN members include regulators from:

• Australia (ASIC)
• Singapore (MAS)
• Hong Kong (HKMA, SFC)
• United States (various state and federal regulators)
• Many other jurisdictions

Through GFIN, you can potentially test your product across multiple markets simultaneously, with coordinated regulatory support.

How to apply for innovation services

Applications to innovation services are made directly to the FCA Innovation team: