FinTech Scotland has launched the Financial Regulation Innovation Lab (FRIL) – an initiative that will help shape the future regulatory landscapes in the UK and around the globe. FRIL will help ignite employment creation and business opportunities, while also unlocking the potential of future talent.
In partnership with the University of Strathclyde and University of Glasgow, FRIL will deliver a wide-ranging, ambitious research agenda, led by and actionable for the financial sector, to help advance understanding and adoption of new and emerging technologies.
Professor Eleanor Shaw, head of the Adam Smith Business School, University of Glasgow said: “The opportunity to transform the regulatory landscape is remarkable and we are excited to work with partners across all sectors to deliver a collaborative centre of excellence for cutting edge developments in financial regulation.”
The Lab delivers one of the strategic recommendations laid out in the FinTech Research & Innovation Roadmap, launched in March 2022, and aligns with the recently announced UK innovation initiative, the Centre for Finance, Innovation and Technology (CFIT), formed in response to the HM Treasury FinTech Sector Review (otherwise known as the Kalifa Review).
“FinTech Scotland is uniquely positioned within the Scottish fintech industry to lead such an initiative as it will work to inspire collaborators across Scotland, the UK and globally, enabling those around the world to see Glasgow’s financial services capabilities,” said Nicola Anderson, CEO of FinTech Scotland. “Bringing the fintech community of industry, academics and regulators together to explore, test and experiment with new technologies is an important part of our mission.”
The Lab will engage participants in industry-led innovation challenge calls, integrate academic research with an industry-relevant agenda, design and implement a skills and education programme, and facilitate knowledge exchange through workshops, roundtables, conferences and trade missions.
Professor David Hillier, associate principal and executive dean of the University of Strathclyde Business School said: “The University of Strathclyde is delighted to partner with Fintech Scotland and the University of Glasgow to deliver this critical initiative. We have significant capabilities across the university in emerging technologies including AI, space and quantum, which we look forward to leveraging through FRIL.
“We look forward to continuing our work with industry, policy makers, regulators and innovative SME’s to drive actionable solutions and deliver on FRILs ambitious agenda.”
Ensuring all areas are covered
The research will cover various aspects of financial regulation, including the following areas:
- Explainable AI applications for ESG risk management
- Simplifying ESG regulation compliance through explainable intelligent automation
- Using automation and AI to combat money laundering
- Synthetic data for financial regulation innovation
- Generative AI for improved ESG reporting and monitoring in financial services
FRIL, which is specifically funded by the Glasgow City Region Innovation Accelerator programme (led by Innovate UK on behalf of UK Research and Innovation), will work with industry participants, including large established financial institutions, the fintech community, academics, voluntary organisations and regulators across the UK.
Stephen Ingledew OBE, chair of FinTech Scotland, explained: “Once more, FinTech Scotland is taking proactive measures to showcase the effectiveness of how a cluster approach can accelerate the UK’s ability to seize competitive advantage in the future of financial regulation and fintech innovation. FRIL will allow us to continue to endorse the opportunity from the fintech sector to support growth across the UK economy.”
Starting strong
The first four industry-led Innovation Calls to be issued in conjunction with Lab will cover four topical areas:
- AI and compliance: Utilising emerging technologies to simplify compliance process and monitoring.
- Consumer Duty: Supporting consumer duty obligations and enhancing financial inclusion outcomes.
- Financial Crime: Addressing future challenges of financial crime.
- ESG: Meeting new regulatory requirements, leveraging new data and new technologies.
Facilitating collaboration and knowledge exchange, FRIL’s output will include white papers, podcasts, newsletters, blogs and a series of events including roundtables, conferences and trade missions. The white papers in particular will cover academic and industry thinking, addressing key questions posed by the opportunity emerging technologies present for financial regulation. The topics of the white papers will be added to and revised on a regular basis ensuring it is Industry led and responsive to Industry needs.
In its pursuit of researching the adoption of emerging technologies into financial services to build confidence in solutions and ultimately demonstrate their ability to meet regulatory standards worldwide, FRIL is committed to focusing on innovations and solutions that can effectively address some of the industry’s most pressing issues.
