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The United Kingdom Financial Conduct Authority (FCA) said it is working towards adopting a blockchain-based digital regulatory reporting system to curb the high cost of compliance.
Nikhil Rathi, the chief of the FCA, made this known at the annual Mansion House gathering in the City of London in a statement published today by Finextra.
According to Rathi, the UK’s financial watchdog will be partnering with the Bank of England on a blockchain regulatory reporting initiative.
With over 20,000 rules established to govern more than 58,000 companies within its jurisdiction, regulatory reports are projected to spike between £1.5 billion ($2.05 billion) to £4 billion ($5.47 billion) annually, Rathi said.
Rathi also noted that using blockchain for the initiative will enhance the speed of compliance checks.
“By connecting firms through blockchain and API technology and implementing machine readable and executable regulations, compliance checks can be completed in near real time,” the FCA chief was quoted as saying.
FCA’s Expansion Plans to Focus on Data Reporting
Recall that in July, the FCA disclosed that it was planning to increase its influence to cover the whole of the United Kingdom.
As part of its expansion plans, the regulator said it would establish a new office in the city of Leeds and would subsequently recruit at least 100 employees at its initial stage, with further plans to also increase its staff strength in Edinburgh to 200.
Commenting on the proposed move, Rathi said the agency will focus on recruiting data scientists and analysts for the two locations.
Since the beginning of the year, the FCA has recorded over 200% surge in the volume of data it has received, which suggests that financial-related companies are becoming more data driven.
Based on this, the UK regulator said it is committed to spending £120 million ($164 million) in the next three years with the aim of being more proactive in identifying financial firms that are planning to flout established regulations.
Strict on Regulatory Compliance
The FCA has always reiterated that the UK is only open for business to firms prepared to comply with its regulatory requirements, and has promised to act decisively when entities choose to go against its rules.
The UK regulator took stern measures against popular cryptocurrency exchange Binance in June, prohibiting the company from conducting regulated activity in the region until it complies with certain requirements.
Last month, the FCA later published an update, stating that the crypto trading platform had complied with its imposed requirements.
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