I know everyone laughs about jargon – business bingo, anyone? – but I think we’re all guilty of it to some extent. I know I expect everyone to understand me when I talk about AML, MLROs and the regulated sector, and the other day my cycling-mad husband accused me of “half-wheeling” him – walking just in front of him, thus forcing him to accelerate. But I came across something yesterday that I just could not decipher: the regulatory sandbox.
I was doing research on technological advances in AML (part of FinTech – more jargon) and came across the sandbox reference a couple of times. Is it where new regulations are embedded to keep them upright and isolated prior to being set on fire, like we used to do in chemistry lessons? Things became a bit clearer when I realised that “sandbox” is the American term for what we English kids would have called the sandpit – the place to play, build castles and dig up unmentionable items. Perhaps “pit” has negative connotations, because even the very British, London-based, pinstripe-suited FCA is now referring to the sandbox. In their recently-published “FCA Business Plan 2018/19”, they trumpet the regulatory sandbox which they created in 2016: “Our regulatory sandbox gives businesses of every size the opportunity to test the commercial and regulatory viability of their innovative concepts before they invest more heavily in them, while providing safeguards for consumers. The sandbox also gives us an understanding of the opportunities and risks of harm that innovation can create.”
But it seems that a simple sandbox in Canary Wharf is not enough: we need to go global. The FCA tells us that “[in February 2018] we invited stakeholders to share their views on what a global sandbox could look like”. This is entirely in keeping with the EU view; in the “FinTech Action Plan” issued by the European Commission in March 2018, it says: “The Commission invites competent authorities at Member State and EU level to take initiatives to facilitate innovation on the basis of these best practices and invites the ESAs to facilitate supervisory cooperation, including coordination and dissemination of information regarding the innovative technologies, establishment and operation of innovation hubs and regulatory sandboxes, and consistency of supervisory practices.“ And there, that’s how you deal with jargon: you strangle it with even more jargon until no-one knows what anyone else is saying.