The Bank of England is getting into the Fintech space. In a speech by Mark Carney, Governor of the Bank of England, Carney embraced the disruptive transformation that is impacting all forms of finance. He pointed to Fintech advocates who believe;
“…the wave of innovation sweeping through the world of financial technology promises nothing short of revolution. ‘FinTech’ heralds the dawn of narrow banking and portfolio optimisation. It will change the nature of money, shake the foundations of central banking and deliver nothing less than a democratic revolution for all who use financial services.”
While acknowledging that some revolutions take some time, and systemic questions remain, Carney expressed his firm belief that Fintech will have “profound implications”. And not just for the Bank of England.
Carney bulleted out the five ways the B of E is enabling the Fintech revolution:
- Widening access to central bank money to non-bank Payments Service Providers, known as PSPs.
- The Bank is enabling the FinTech transformation is by being open to providing access to central bank money for new forms of wholesale securities settlement.
- The Bank is enabling the FinTech transformation is by exploring the use of Distributed Ledger (DL) technology in our core activities, including the operation of RTGS.
- The Bank is enabling the FinTech transformation is by partnering with FinTech companies on projects of direct relevance to the Bank’s mission.
- The Bank is calibrating its regulatory approach to FinTech developments.
The Bank of England’s accelerator program will select Fintech firms to take part in short proof of concept projects (POCs) via a transparent and competitive process, based on defined selection criteria. These criteria seek to ensure that each project has the potential to be truly innovative, relevant to the Bank’s mission and mindful of commercial considerations.
At the end of the proof of concept, the Bank will consider producing an assessment of their experience and will be publishing the findings.
The Bank’s Fintech Accelerator has apparently already carried out initial work in the areas of data anonymisation, cyber security, and distributed ledger technology. The accelerator is also interested in the following categories:
- finding new ways to structure and analyse large datasets
- machine learning, particularly in relation to anomaly detection and pattern recognition
- protection of the Bank’s sensitive data
The Bank is willing to consider other verticals recognizing the truth that it can be challenging to predict future innovations.
Interested applicants may find more information here.
The UK is arguably the leading nation when it comes to financial innovation. The supportive entrepreneurial ecosystem has been backed up by a vocal and active government. Matching words with actions, such as the B of E program, is an important variable in fostering an innovation economy.