How the Bank of England continues to be at the vanguard of new technology

How the Bank of England continues to be at the vanguard of new technology

The UK’s central bank has continued to embrace change and the rise of FinTech; looking at new technologies, which are changing the way financial institutions conduct their business. They have recently been outspoken about two key technology trends RPA and Central Bank Digital Currencies. These are two technologies, which have the potential to be a major facet of the digital transformations taking place within financial services. They could also be key to an economy re-focussing on a 4th industrial revolution.

RPA has the potential to change everything

When companies talk about the implementation of their AI strategy, they are more often than not talking about how they are implementing Robotic Process Automation. AI is the buzzword that is talked up at industry conferences; RPA is the actual coalface technology.

Widely seen as a major enabler of organisational transformation, Robotic Process Automation (RPA) denotes a process that utilises software programmed to autonomously carry out basic tasks across applications, reducing the burden of repetitive, simple tasks on employees. The cost effective process is able to be developed and deployed in the space of a few weeks, and can typically demonstrate returns on investment within a matter of months.

The banking industry is exploring the potential of RPA in order to break down larger jobs, and reduce human-induced labour. RPA has already proven to be efficient in handling work overflow in this way, as well as tasks involving heavy data.

The recently appointed new Governor of the Bank of England, Andrew Oldham made this the topic of his first major speech on financial technology since being appointed. The topic being ‘Reinventing the wheel (with more automation).

This speech looked in detail at the rapid pace of change currently happening in the payments ecosystem. Most specifically the drive for innovation and implementation of new technologies in an increasingly digitised society.

Is the future a virtual £ Stirling?

2019 saw blockchain very much in the trough of disillusionment. The buzz was gone and replaced by a cynicism about the lack of real world implementation of DLT. This year has seen renewed optimism about the opportunities blockchain presents; most specifically centralised digital currencies replacing traditional currencies. Mr Oldham, states in his September 3rd speech;

‘Digital central bank money would surely address the decline in the use of paper money without the complications of creating the protections required around stablecoins? Yes and no is I suspect the answer. The question is a good one and should be considered (and is being so) but the answer is not in yet. It is a very big question.

Offering a CBDC would allow broad access to central bank money in a digital form. But any launch of a CBDC requires careful prior consideration to fully explore all the issues and implications in order to make an informed decision; including ascertaining that there would be demand for such a thing.’*

An ambiguous answer one would seem; but it is clear that both RPA and Central Bank Digital Currencies are clear topics that the BoE are looking at championing in a post COVID world. Conveniently they are also very central topics to this year’s FinTech Connect agenda.

Hear about how the UK’s central bank continue to innovate from William Lovell, Head of Future Technology who will be delivering a keynote case study at Blockchain Connect part of FinTech Connect on December 4th.

Source: https://www.bankofengland.co.uk/-/media/boe/files/speech/2020/reinventing-the-wheel-with-more-automation-speech-by-andrew-bailey.pdf?la=en&hash=6B5DE50DC09345C4D88FA9BF6CC1F660CA742FD4