Bank of England Keen to Foster Fintech Innovation

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We have recently seen several governments and financial regulators presenting regulatory sandboxes and now central banks are also stepping in, with a “Fintech Accelerator” that was announced by Mark Carney, the governor of the Bank of England (BoE) on Friday. It’s now more and more clear that the financial technology industry is maturing, transitioning from disruption to a sustainable growth, well supported and embraced by institutions.

“Fintech should neither be the wild west nor strangled at birth. The Bank is devoting considerable resources to ensure whatever develops is sustainable, not ephemeral”. Adding that “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”.

Talking about the ‘accelerator’ Carney said that it “will work with new technology firms to help us harness fintech innovations for central banking. In return, it will offer firms the chance to demonstrate their solutions for real issues facing us as policymakers, together with the valuable ‘first client’ reference that comes with it”.
Basically fintech companies will be able to pitch their solutions, in order to solve new problems for the British Central Bank, going from cyber security to data protection.

The Bank of England is also examining digital currencies and the technology behind bitcoin to see how it can help to make the central banking services better. Even if Carney stated that “the prospect of a central bank digital currency for the UK is still some way off” he also added that they will work to make payments easier. According to the FInancial Times, under the new fintech reforms, non bank payment providers will be able to access the Bank of England’s Real Time Gross Settlement (RTGS) services, which handles about £500bn of transactions per day, allowing them to avoid to go through the clearing banks.

UK is in a promising and enviable situation at the moment, having been able to understand the revolution coming with financial technology earlier than most countries. By putting in place ambitious plans to take the most out of this wave of innovation in finance, and with the help of a strong ecosystem, there is space for a financial market that will be more transparent and democratic.

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Freelance writer & digital strategist. European Commission expert, Fintech curator at Techstars Startup Digest, SXSW advisory board member.

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