The Bank of England has recently published a speech originally intended to be delivered by Mark Carney, Governor of the Bank of England, at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London on 16 June 2016.
The speech focused on FinTech and announced a number of Bank of England initiatives intended to promote its development. In highlighting the way the Bank of England intends to enable the transformation of FinTech, Mr Carney announced initiatives to be undertaken by the Bank of England, which include (among others):
- The widening of access to central bank money to non-bank Payments Services Providers so they may compete on a level playing field with banks.
- Partnering with FinTech companies on projects of direct relevance to the Bank of England’s mission.
- Calibrating the Bank of England’s regulatory approach to FinTech developments.
Mr Carney set out the three potential outcomes of FinTech development to be as follows:
- Revolution – the unbundling of banking into its core functions.
- Restoration – incumbent banks become more efficient and profitable, reinforcing existing economies of scale and scope in banking.
- Reformation – a more diverse, resilient and effective system for consumers, where large banks exist alongside new entrants.
The speech concludes by stating that with time, FinTech could mean a more open, more transparent, and more democratic global financial system.