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The extra workload being placed on banks to prepare for the UK’s proposed exit from the EU has forced the financial services watchdog to delay a request for information about the use of data in wholesale banking.
The Financial Conduct Authority (FCA) said it had expected to publish what is known as a Call for Input (CFI), where regulated companies are asked for feedback on certain issues, on the access and use of data in wholesale markets.
But the FCA has said it has postponed the CFI to enable companies that would normally respond to focus on preparing for Brexit – the form of which is still an unknown event to the UK government.
“We are mindful of the resources that stakeholders, who would ordinarily respond to the CFI, are dedicating to preparing for and implementing the change resulting from the UK’s exit from the EU. Therefore, we have decided to postpone this publication to allow firms to focus more time on EU Withdrawal,” said the FCA in a statement.
But the FCA affirmed its commitment to such an investigation, which will help it design regulations. “There is rapid and wide-ranging innovation in data in wholesale markets. Firms’ ability to gather and analyse data has grown tremendously in scope and in speed, with a corresponding increase in the value of data,” added the FCA.
It said this could have benefits through the availability of more efficient, comprehensive and timely data. “We therefore still intend to undertake diagnostic work to understand the changes and to identify possible harms and their drivers,” it added.
Financial services companies have their work cut out getting ready for Brexit, particularly as it is not yet clear what form of exit the UK will adopt.
Banks have prepared for a Brexit based on Theresa May’s deal and then had to prepare for a possible no-deal Brexit since the current minority government has moved in that direction.
In 2018, a Bank of England report found that 80% of financial services respondents to a survey specifically cited Brexit as a risk to the stability of the financial system.
Read more about how Brexit effects on UK financial services
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- FCA admits it will be unable to manage financial crime effectively if it cannot share data with EU authorities.