The United Kingdom’s Digital Regulation Cooperation Forum (DRCF) on March 10 announced in its 2021–2022 workplan that the UK Financial Conduct Authority (FCA) will join as a full member from April 1, 2021.
The UK Competition and Markets Authority (CMA), the Information Commissioner’s Office (ICO), and the Office of Communications (Ofcom) formed the DRCF in July 2020 to ensure a greater level of cooperation on online regulatory matters and to enable coherent, informed, and responsive regulation of the UK digital economy. The CMA, ICO, and Ofcom stated that by working together, they will be better able to respond to the scale and global nature of large digital platforms and the speed at which platforms innovate.
The DRCF’s founding objectives focus on collaboration, informed policy making, and enhanced regulatory capabilities, as well as on anticipating future developments, promoting innovation, and strengthening international engagement.
Impact of FCA’s Full Membership
The FCA has been an observer member since the establishment of the DRCF. Its full membership may deepen the FCA’s engagement with the DRCF and both inform and potentially enhance the DRCF’s influence on policy making.
First off, the FCA will bring financial regulation within the DRCF’s scope of regulatory cooperation, which currently includes competition, communications services and broadcasting, data protection, and regulation of harmful online content. The increasingly online nature of financial services creates many overlapping issues with the DRCF’s other policy areas.
The FCA will also offer significant experience in digital regulatory developments, having led policy approaches to support fintech innovation via its regulatory sandbox. The DRCF touts the FCA’s experience on data regimes such as open banking and open finance. In respect of artificial intelligence (AI), which is one of the DRCF’s focuses for the coming year (see below), the FCA is working on a collaboration with the Alan Turing Institute to consider artificial intelligence transparency, which is expected to be reported shortly, and it is working with the Bank of England on the AI Public Private Forum to facilitate dialogue between the public and private sectors to better understand the use and impact of AI in financial services.
Finally, the FCA’s established relationships with financial regulators in other jurisdictions and global regulatory organizations may prove valuable for strengthening the DRCF’s international engagement.
DRCF’s Workplan for 2021–2022
The DRCF’s 2021–2022 workplan details how its members will pool their expertise and resources, work more closely together on online regulatory matters of mutual importance, and report on results.
The workplan identifies three priority areas:
- Responding strategically to industry and technological developments, through launching joint projects on cross-cutting issues. The DRCF states that projects will include research into service design frameworks, AI, digital advertising technologies, and end-to-end encryption.
- Developing joined-up regulatory approaches. The DRCF states that areas of focus will be on the interrelation between data protection and competition regulation, the ICO’s new Age-Appropriate Design Code that will become effective in September 2021, and the regulation of video-sharing platforms and online harms.
- Building technical and analytical capabilities. The DRCF states that this will involve exploring operational models to support more efficient skills and expertise sharing in the future, such as cross-regulator specialist teams.
The DRCF does not itself have regulatory powers to make or enforce rules. However, the DRCF’s output will be worth monitoring over the coming year as its work, particularly its research and conclusions from stakeholder engagement, may influence the rule making of its individual members.