In recognition of the emerging fact that “data is the new oil,” Bank of England’s Governor Mark Carney iterated the British financial authority’s plans for its processes and systems. Included in the new technologies that they will be making use of is Distributed Ledger Technology (DLT).
In a comprehensive speech at the annual Mansion House dinner on June 21, Carney revealed that they are “in the midst of an ambitious rebuild of the Real Time Gross Settlement (RTGS) system — the backbone of every payment in the UK.”
With this, Carney presented three ways for the Bank’s new RTGS to provide a ‘platform for private innovation’.
First, Carney said that the system is being rebuilt in a way that it would be compatible with new private payment systems, as including those that are using the distributed ledger. He described the infrastructure to be “hard-proofed to your imaginations, opening up a range of potential innovations in wholesale markets, and corporate banking and retail services.”
Second, RTGS is being remade in a way that it will rid of excessive costs for cross-border payments. This is what excited many, since, at the present setup, these payments can cost up to ten times more than domestic ones. Carney said that there are already two Payment Service Providers (PSPs) that have joined earlier this year. Also, the Bank of England has already begun partnering with the Bank of Canada and the Monetary Authority of Singapore, not to mention other private firms that are sharing similar interests.
Third, the new system will be realizing the ‘promise of big data’. Carney admitted that the bank is still consulting experts on how to accomplish this initiative.
The bank is not only into distributed ledger technology; Carney said that they’re also exploring how Artificial Intelligence (AI) and machine learning could also be used for making their rulebooks easier to read. All of these are consonant with their intent at making their rules and regulations fit for the new finance.
In conclusion, Carney said:
“The Bank recognizes that a new economy, a new world and new demographics demand a new financial system. That is why [the Bank is] building the infrastructure so that UK households and businesses can transact anywhere, anytime with anyone whether around the corner or around the world.”
(Image Source: WalkLondon)