The Consultative Group to Assist the Poor (CGAP), in collaboration with 11 financial regulators, has announced this week the creation of the Global Financial Innovation Network (GFIN), building on the FCA’s proposal earlier this year to create a "global sandbox".
The GFIN is a collaborative policy and knowledge sharing initiative aimed at advancing areas including financial integrity, consumer wellbeing and protection, financial inclusion, competition and financial stability through innovation in financial services, by sharing experiences, working jointly on emerging policy issues and facilitating responsible cross-border experimentation of new ideas.
The desired outcome of this initiative is a global financial services system that better serves broader society through harnessing new technology to provide an overall improved level of service and experience. It is also to create a new framework for cooperation between financial services regulators, which complements the work of standard setting bodies and other international stakeholders.
The major emerging innovation trends within financial services are increasingly global, rather than domestic, in nature. For instance, big data, artificial intelligence (AI), and blockchain-based solutions are being developed and deployed simultaneously in different financial markets. Since there is a general trend towards developing these digital solutions, now is a time to consider how to begin building new ways to share experience and manage the questions that emerge. Financial services regulators must re-consider existing ways of working and collaborating, in order to balance potential benefits of innovation with traditional policy objectives, namely financial stability, integrity, financial inclusion, competition and consumer wellbeing and protection. The GFIN is aiming to become such a new way of collaboration.