By Irina Mnohoghitnei, Simon Scorer, Khushali Shingala and Oliver Thew of the Fintech Hub.
- The UK economy is becoming increasingly digital with high levels of smartphone and internet penetration, a growth in e-commerce, the emergence of new technologies and an enhanced ability to capture and analyse large amounts of data
- Fintech is supporting this shift by enabling new players and business models to enter the market. This could increase competition, meet unfulfilled customer needs, reduce inefficiencies and change financial services. Overall, this could create a more efficient, effective and resilient financial system. At the same time, new risks to financial stability may emerge and existing risks could be amplified.
- The Bank of England’s mission is to promote the good of the people of the UK by maintaining monetary and financial stability. As such, it seeks to understand what fintech means for the stability of the financial system, the safety and soundness of financial firms, and its ability to perform its operational and regulatory roles.
- The Bank of England is committed to embracing fintech to deliver its mission. As such, it is upgrading its hard infrastructure — particularly its payments architecture — to enhance security and support innovation, while also updating its ‘soft infrastructure’ — including rules and regulations — to mitigate potential risks. The Bank of England is also applying new technology to enhance its own capabilities.
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