Lowering barriers to expansion and entry
Tandem Bank (authorised in November 2015) is a digital-only bank that is retail will operate your own finance guide which compares lending options made available from both Tandem as well as its competitors. Other innovative banks are in the pipeline for authorisation.
Other initiatives to guide new and firms that are innovative
The financial institution of England supports innovation in financial services through its strive to promote innovative research and data analytics in central banking, and improving the ability of innovative firms to gain access to Bank of England facilities. The lender in addition has embraced new technology in the provision of UK banknotes.
Research and analytics
The financial institution launched its One Bank Research Agenda initiative in February 2015 to try to understand and develop innovative practice that is best in central banking, taking into account technological, institutional, social and environmental change.
It is designed to facilitate open dialogue between the lender as well as the research community to aid innovation and inform the Bank’s work. The Bank has set up a study Hub division to greatly help drive this forward and developed a new online blog, Bank Underground.
The initiative covers research questions on five broad themes: policy frameworks and interactions; evaluating regulation, resolution and market structures; policy operationalisation and implementation; new data, methodologies and approaches; and a reaction to change that is fundamental.
In particular the fundamental change workstream takes a longer term glance at how technological (along with other) innovations might affect central banking over a lengthier horizon. This can include, for instance, examining the impact of digital currencies or finance that is alternative, and any associated economic, technological and regulatory challenges.
As an element of its broader research agenda, the financial institution publishes new datasets to facilitate external research. This includes long term historical data, the Bank of England’s balance sheet and data recorded by the Bank’s regional agents. The long-term plan is to start up a lot more of this Bank’s data to your public.
The Bank in addition has set up an enhanced analytics division and data lab to exploit new and innovative analytical tools and techniques, analyse new data sources such as social media, and help spread practice that is best in the analysis of the latest big datasets both inside and outside the lender.
The division is also developing relationships with external partners of this type, and recently ran a data visualisation competition to activate with data scientists and students throughout the UK.
In the payments space, the lender is conducting research into innovations in payments technology, with a specific give attention to digital currencies and also the distributed ledger systems that underpin them.
This builds on the Quarterly Bulletin articles published by the lender in 2014, which considered the architecture that is technical of currencies, as well as the economic theories that govern how it works.
Following extensive consultation that is public the Bank announced in December 2013 that new Bank of England banknotes will now be printed on polymer. Polymer is a thin and flexible plastic-type material that has benefits over and above current paper banknotes.
Polymer notes are cleaner and much more durable – these are generally more resistant to dirt and moisture, more environmentally friendly and last at the very least 2.5 times more than paper banknotes. Polymer notes will also be more secure, with advanced security features that offer a step-change in counterfeit resilience. The full design of this Ј5 note is likely to be unveiled on 2 June and the banknote introduced in September 2016, aided by the Ј10 note issued in 2017, and Ј20 note by 2020.
Use of Bank of England facilities
The financial institution has broadened the number of collateral accepted in its market operations to now include residential mortgages, asset finance, signature loans, auto loans, corporate loans, SME loans and revolving credit facilities.
This allows access for a wider number of counterparties – over 80 banks and building societies now have assets placed at the Bank, ready to be used in initiatives like the Funding for Lending Scheme. Work is underway to ensure there aren’t any obstacles that are technical the Bank’s ability to accept equities as collateral if the need arise.
The Bank commenced work in 2015 to assess the feasibility of establishing a Shari’ah compliant facility as part of its strategy to broaden liquidity provision in the market.
The Bank recognises the difficulties Islamic banks face in meeting liquidity requirements with the current limited variety of options – existing facilities are not Shari’ah compliant as they involve interest-bearing activity. The Bank has also become an member that is associate of Islamic Financial Services Board (IFSB ).
The Bank has introduced prefunding for Bacs and Faster Payments, which lowers barriers to entry for banks and building societies looking to become members of these payment schemes in its provision of payment services.
Previously, a part among these schemes had to hold securities as collateral and agree to a mutual loss-sharing framework. Prefunding allows each institution to handle their exposure limit using reserves at the lender.
In January 2016 the lender announced its plan to design a blueprint money for hard times of the UK’s value that is high settlement system – the actual Time Gross Settlement System (RTGS ). The financial institution can look to redesign RTGS in such a way that its resilience is further enhanced, while as well enabling innovation.
2.8 How services that are financial are better utilising new technologies to build efficiency savings and lower burdens on business – RegTech
Regulators not just have a job to try out to advertise competition and innovation, but in addition in using advances that are technological reduce regulatory burdens on firms and drive efficiency savings. The FCA and PRA have now been particularly dedicated to this issue.
Firms need certainly to meet higher regulatory standards and greater reporting requirements following the crisis that is financial. New technologies which help firms better manage these regulatory requirements and minimize compliance costs (so-called RegTech) are good for effective competition and innovation.
The main focus of those were to know:
The purpose of this consultation would be to seek views regarding the work of financial services regulators to aid innovative technology and disruptive business models, and understand where there might be gaps in regulatory approach with regards to innovation that is supporting.
3.1 Consultation questions
The government invites responses from all online homework help interested parties, in particular both regulated and unregulated firms and innovators when you look at the financial services sector, from the following specific questions.
- Does the UK’s environment that is regulatory financial services effectively support innovation?
- Do financial services regulators understand innovation in financial services and potential places where new technologies and business that is disruptive might emerge into the sector?
- Are there any gaps in approach or places where financial services regulators should be doing more to support innovative technology and disruptive business models in financial services?
- Is there more that financial services regulators could do to better utilise new technologies to produce their own work more effectively?
3.2 How exactly to respond
This consultation will run from 22 to 6 May 2016 april.
Responses must be sent by email to Innovation plan consultation.
Alternatively please send responses by post to:
Innovation Plan consultation
Banking and Credit team
1 Horse Guards Road
London SW1A 2HQ
When responding, please say if you are making a representation with respect to a business, individual or representative body. Within the case of representative bodies, please provide home elevators the quantity and nature of individuals you represent.
Information provided as a result to this consultation, including information that is personal might be published on disclosed according to the use of information regimes. They are primarily the Freedom of Information Act 2000 (FOIA), the Data Protection Act 1988 (DPA) and the Environmental Information Regulations 2004.
If you would like the knowledge that you provide to be treated as confidential, please be aware that, under the FOIA, there is a statutory code of practice with which public authorities must comply and which relates to, amongst other activities, obligations of confidence. In view for this it would be helpful us why you regard the information you have provided as confidential if you could explain to.
We will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances if we receive a request for disclosure of the information. An automatic confidentiality disclaimer generated by your IT system will likely not, of itself, be seen as binding on HM Treasury.
HM Treasury will process your individual data prior to the DPA and in the majority of circumstances this will mean that your private data will not be disclosed to parties that are third.