The U.K.’s Financial Conduct Authority aims to invest 120 million pounds (approximately $166 million) toward “data and technological capabilities” during the three years to come, according to a draft of a speech that Nikhil Rathi, the regulator’s CEO, gave during a digital webinar.
“Better capacity and tools to collect, triage and store data will allow our people to have the right information at the right time,” Rathi said in his speech. “What will ultimately transform our ability to act is how we [analyze] it. Using techniques from data science and social science — especially [behavioral] science and economics — is already enabling us to make more robust, evidence-based decisions.”
Rathi also disclosed that the FCA has seen a 200 percent increase in the quantity of data it has to handle for probes.
“That’s only going to continue to increase exponentially,” he said in the speech. “Financial services businesses themselves are increasingly becoming data-led businesses.”
He noted that the FCA’s new chief data, information and intelligence officer, Jessica Rusu, provides knowledge of artificial intelligence (AI) in addition to a background in FinTech and Big Tech.
Rathi also pointed out that the FCA has witnessed a dramatic rise in the number of younger people “speculating” with digital currencies or “other high-risk investments.”
To that end, the FCA released research in the last year that determined that almost 2.5 million individuals in the United Kingdom had acquired crypto assets.
“There is evidence too that, as with the GameStop episode, more people see investment as entertainment — behaving less rationally and more emotionally, egged on by anonymous and unaccountable social media influencers,” he said in the speech. “This is a category of consumer that we are not used to engaging with — 18- to 30-year-olds more likely to be drawn in by social media. That’s why we are creating an [11 million pound (approximately $15 million)] digital marketing campaign to warn them of the risks.”
The news comes as the FCA told over 300 FinTechs to reach out to their clients to remind them of the risk of storing money in accounts that aren’t safeguarded by the Financial Services Compensation Scheme, which protects deposits.