Featured Product

    Dave Ramsden of BoE Explains Its Approach to Fintech

    October 29, 2019

    Dave Ramsden, the BoE Deputy Governor for Markets and Banking, spoke at the Bund Summit in Shanghai about the approach BoE has taken to fintech. While elaborating on the approach, he emphasized three dimensions of openness—being open to new ideas, being open to new businesses entering financial services, and being open to improving the operations. He explained that BoE is reviewing its data strategy to embrace new technology, exploring use of open banking to help small businesses harness the power of their data, looking to make the regulatory rulebook machine-readable, and deploying proof-of-concepts to see what potential benefits artificial intelligence or machine learning could have for identifying regulatory issues.

    Mr. Ramsden highlighted that being open to new ideas and new ways of doing things is crucial for innovation. New approaches can improve the quality and inclusiveness of the financial services. However, this openness should not compromise the existing standards. Instead, it is necessary to weigh potential benefits to efficiency and resilience, against potential risks to financial stability. New general purpose technologies like artificial intelligence and machine learning hold the promise of increasing economic productivity and providing better products across the economy, including in financial services. To ensure that the risks and opportunities are balanced appropriately, BoE is researching machine-learning deployment. Throughout the work on artificial intelligence/machine learning the aim is to enable safe innovation. This is how BoE balances the competing demands of its primary objectives, which include ensuring financial stability and ensuring safety and soundness of firms, and its secondary objectives such as promoting competition.

    He highlighted that in the UK a model of open banking has been pioneered, using Application Programming Interfaces (APIs) that allow consumers to have better control over their banking data. If the architecture and legal and technical safeguards can be built, users can have sight of, and control permissions for, every use of their data. BoE is exploring the possibility of applying this approach to help small businesses harness the power of their data, drawing on some positive aspects of China’s experience with real-time data. Next, he talked about the importance of BoE being open to changing the way it works. He highlighted that, to regulate the digital economy effectively, it is necessary to be equipped with appropriate digital tools. BoE wants to leverage modern technology so that the way it collects and analyzes data becomes cheaper, faster, and more effective. This would provide a foundation that is both more resilient and has lower barriers to entry; helping private sector innovation to flourish.

    To achieve these goals, BoE is reviewing its data strategy to embrace new technology. Work has started on deployment of proof-of-concepts to see what potential benefits artificial intelligence or machine learning could have for identifying regulatory issues. BoE is also looking to make the regulatory rulebook machine-readable, providing a platform on which firms can develop innovative methods to ensure their compliance. Finally, Mr. Ramsden noted that it is important to leverage existing forums to promote global co-operation and co-ordination on technology issues. Global financial institutions for policy coordination (such as FSB, BIS, and IMF) provide important forums in which one can highlight concerns and work to find agreement where it exists. He mentioned that BoE wants to work with its international partners to ensure fintech is supported by international cooperation, rather than creating new dislocation.

     

    Related Link: Speech

     

    Keywords: Europe, UK, Banking, Fintech, Artificial Intelligence, Machine Learning, Open Banking, Reporting, Machine-Readable Regulations, BoE

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582