NorthRow, a Contego solutions business, has been selected to be part of the fourth cohort of the Financial Conduct Authority’s (FCA) Regulatory Sandbox.
The RegTech and compliance specialist that helps financial services organisations improve their customer onboarding experience by automating Identity Verification (IDV), Anti-Money Laundering (AML) and Know Your Customer (KYC) services was chosen following a rigorous process to meet the FCA’s suitability criteria.
The Sandbox allows firms to test innovative products, services or business models in a live market environment, while ensuring that appropriate protections are in place. It is a part of Innovate, an initiative launched in 2014 which is committed to encouraging innovation in the interest of consumers. The Sandbox was a first for regulators worldwide, underlining the FCA’s commitment to innovation in financial services.
NorthRow currently handles Open Banking’s verification processes for onboarding FinTech firms and other financial organisations in the UK, European Union and the rest of the world, ensuring both security and customer needs are embedded at the very core of client onboarding processes and thus providing the highest levels of identity verification without compromising the user experience.
Selection to the Sandbox will allow NorthRow to test the use of regulated financial data in a controlled environment to strengthen existing KYC processes. This will enhance verification by automating access to a high quality, trusted sensitive data source.
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Adrian Black, CEO of NorthRow, said:“Being chosen to be part of the FCA Regulatory Sandbox is a testament to our credentials and tireless efforts to improve and streamline client onboarding processes in a secure way. Accessing regulated financial data in a protected environment differentiates us from other identity verification providers who rely on manual, time-consuming processes to verify bank account data. It is the first step in our ambition to achieve FCA approval, which is required to access bank account data.”
The FCA received 69 submissions for the fourth phase of the Regulatory Sandbox and 29 applications met the eligibility criteria and were accepted to develop towards testing.
Applications were submitted from a diverse range of sectors and locations, and from companies of all sizes. Accepted propositions cover a range of areas, including: consumer credit, automated advice and travel insurance.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said: “I am pleased to say that this is the largest sandbox cohort to date with a record number of applicants meeting our eligibility criteria. Cohort 4 has seen a large increase in the number of firms testing wholesale propositions including firms that are aiming to increase the efficiency of the capital-raising process. Alongside these we can see significant use of distributed ledger technology (DLT), some experimentation with cryptoassets which will help inform our policy work and propositions aimed at helping lower income consumers.”
NorthRow has experienced a strong surge in growth this year through Q1 and into Q2, and the momentum continues. As well as being selected by the Department for International Trade (DIT) to join the second Annual UK Trade Mission to New York FinTech Week, an increasing number of firms, including Open Banking in January and Muinmos in May, have adopted Northrow’s technology to increase operational efficiency and enhance customer experience whilst reducing compliance risk.