Fintech Compliance Authorisation

Fintech Compliance Authorisation is a really important thing, and especially if you’re planning to conduct your business in the United Kingdom. Some financial technology firms attempt at trying their luck without getting in contact with the Financial Conduct Authority (FCA) which issues these kinds of authorisations, only to end up being beaten to the market by other firms.

Some experts in financial business claim that most new firms started and developed without even considering to go regulated become involved in a web of problems, including regulation fall foul, costly delays, and in some cases, even firm failures. Some of these firm owners say that they prefer directing all of their energy into development, and then hoping that the authorisation process is going to be something simple that gets done with a simple swoop of hand. However, this isn’t always so, because the regulation agency frequently needs additional information to complete the process of approving a firm for authorisation. If such a thing happens, the authorisation process might drag for another six months, and delays can be a real disaster for many start-up fintech companies. These companies hardly ever have any money, and a disaster on this plan could lead to uncomfortable negotiations with the lenders, or even to the risk of ceding competitive advantage.

However, on the other hand, there are those experts who claim that the newly developed Fintech companies really need the FCA by their side, because these companies usually challenge the traditional means of doing business and always seek to find a new way for getting things done.  Now, this might not always be in accordance with the with the evolving business models, and it is the FCA’s duty to protect the customers. The Financial Conduct Authority is an agency that is really willing to get in touch and speak to the fintech firms that are in early stages of development, and then offer to guide them regarding the regulatory matter. But, not all the start up companies understand this. Also, engaging with the FCA at the earliest possible opportunity also limits the expenditure needed for this endeavour.

Another thing why this kind of authorisation is really necessary for all the fintech firms out there is the sense of safety. And by that, we mean the sense of safety by the clients. Whenever a client sees that the fintech firm they wish to do business with is authorised, they’ll feel a sense of relief, knowing that this company has a certain and a bulletproof plan in case something goes wrong. And that’s exactly what attracts new clients – a sense of safety and security. This is really important for all the fintech start ups to realize, because the quicker they realize this, the quicker the number of their clients is going to grow.

We’ve seen that there are some bad sides to FCA authorisation, but there are far more good ones, and that is exactly why every fintech firm (and especially the new ones) ought to get authorised. Sure, it might take some time, but the revenue and the client number it could bring make it all worth while.