"If FinTech enhances participation in financial markets, the wealth channel of monetary policy could strengthen."
The FinTech Accelerator will work with new technology firms to help the Bank harness FinTech innovations for central banking.
Partner firms will be selected to engage in short Proof of Concept projects based on clearly defined selection criteria, which aim to ensure the project is innovative, relevant to the Bank’s Mission and that commercial considerations are taken into account.
At the end of the POC, the Bank will consider producing an assessment of the work and a description of the findings. For successfully completed POCs, the Bank will consider acting as a reference client for the firms.
The Accelerator has already carried out initial work in the areas of data anonymisation, cyber security and distributed ledger technology. Other areas of potential future interest for the Accelerator include finding new ways to structure and analyse large datasets, machine learning, particularly in relation to anomaly detection and pattern recognition, and protection of the Bank’s sensitive data.
However, the Bank says its interest is not limited to the topics above and welcomes expressions of interest from innovative firms in all areas of FinTech that can demonstrate how their work relates to the Bank’s mission.
In a planned speech to be given at the Mansion House yesterday, Mark Carney said: "FinTech has the potential to affect monetary policy transmission, the safety and soundness of the firms we supervise, the resilience of the financial system, and the nature of shocks that it might face.
"It could also have profound implications for the Bank’s secondary objective, as supervisors, to facilitate effective competition between the firms we regulate.
"The impact on firms’ safety and soundness depends on several factors. By making wholesale and retail settlement faster and capital allocation more efficient, FinTech could boost banks’ returns and therefore viability.
"FinTech could also affect the conduct of monetary policy. Unbundled banking would change the roles of bank capital and funding costs in the credit channel of monetary policy. If FinTech enhances participation in financial markets, the wealth channel of monetary policy could strengthen.
"More broadly, Big Data techniques could tell us about the state of the economy more accurately and promptly. Forecast performance could improve, akin to the forecast improvements that better measurement of atmospheric conditions has, over time, delivered for meteorologists."
