The UK's Financial Conduct Authority has created an advice unit to support firms with automated advice models.

The initiative comes in direct response to a recommendation from the Financial Advice Market Review, a project led by the FCA and Treasury jointly.

“For new products, we will continue to monitor the development of automated advisory services (often described as robo-advice) in the financial sector, as well as new draw-down products being designed and delivered in response to the new pension freedoms,” the FCA said.

In its business plan for 2016/17, the FCA pointed out the fact that technology could make financial service firms more competitive and efficient while coming up with more innovations. It also pointed out the risks it engenders, not least for operational resilience, cybercrime, the insecurity of information and so-called 'financial exclusion.' Indeed, the threat of hacking is a particularly topical one in the light of this week's “Panama Papers” saga, the result of a massive leak of data about offshore accounts in Panama.

Last month, the FCA signed an agreement with the Australian Securities and Investment Commission to support financial technology businesses that wanted to enter each other’s markets.

“This year we will foster new ways to help firms of all sizes develop novel ideas for market through our ‘Regulatory Sandbox’, which offers firms a safe space to test innovation, reducing the regulatory burden whilst achieving greater compliance,” said Tracey McDermott, the acting chief executive.