We are pleased to announce that JO1N has officially been accepted to the UK Financial Conduct Authority (FCA)’s Regulatory Sandbox which allows firms to test innovative offerings in a live environment. More information on the FCA’s sandbox can be found here.
As part of the sandbox, we will be part of cohort 7 and will conduct our test alongside 12 others that have also been accepted to test in the sandbox. Baker’s dozen We believe that this is a great opportunity to enhance our product while making sure that we are delivering great value to the consumers.
Since the inception of the sandbox, around 150 innovative companies have been accepted to test their products and services in the FCA’s sandbox. This year’s cohort consists of 13 companies that we are proud to be a part of.
The undisputable message is that the sandbox has delivered tangible value to firms, ranging from guidance on the implementation of regulatory frameworks to innovative propositions to reviewing the risks relating to their business model. While the FCA has emphasised strongly that it does not “cherry-picking”, the feedback from our internal research on previous participants is that being accepted into the sandbox, and testing the underlying technology in a live environment, has historically increased the trust and credibility of firms among consumers and investors.
In this post, we summarise the observations that emerged from our application. The story is not complete and there are more stages for us to go through, but we thought it would be useful to share our journey so far
We wanted the Sandbox to help us achieve the following:
The authorisation, testing and exit phase haven’t started for us yet but we are looking forward to what comes next and for what the future will bring
Once we receive the required authorisation, we will start testing. However, it’s important to recognise that there might often be a big-time interval between being accepted into the sandbox and therefore the start of any testing.
In many cases, it might take a few months to obtain the restricted authorisation(s). And even after a firm is authorised, mobilising capabilities for testing can be time-consuming – specifically customer acquisition and even opening a business bank account under the current market conditions have proven to be common challenges for new entrants.
It is important to note that concerning customer acquisition, firms testing in the sandbox are responsible for identifying real customers to perform their tests with. Start-ups with few or no customers (and sometimes limited marketing budgets) tend to find this a bigger challenge than more established firms with an existing client base. When appropriate, partnerships with other firms can help overcome this obstacle, for that reason we have carefully planned the rollout and hope to surprise you with big announcements quite soon.
In addition, for resource-constrained start-ups, running a test alongside business-as-usual activities and existing clients can be a significant challenge. On the other hand, a tight testing time has benefitted some firms because it forced them to prioritise and accelerate the development of their innovative products.
At the end of the sandbox testing period, the tests will be reviewed by both the firm and the Sandbox team to assess the test against a range of success measures. The FCA will then work closely with each firm to ensure that the appropriate course of action is taken as they progress out of the sandbox.
We hope that our experience will help other innovative companies to apply and succeed in the next cohort. Moreover, we are confident that something good is waiting for us ahead. Looking forward to more all-nighters
Stay tuned for more exciting news, more articles on our step-by-step application guide to follow up soon.
Join us on our journey!