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Bank of England eager to 'harness fintech innovations for central banking' in new accelerator project

Out-Law News | 20 Jun 2016 | 5:18 pm | 1 min. read

Financial technology businesses will have the chance to demonstrate how their innovations can benefit central banking in a new initiative announced by the Bank of England (the Bank).

The Bank has launched a 'Fintech Accelerator' in a bid to find technology companies to work with on "proof of concept projects" with the aim of enabling it to "harness fintech innovations for central banking", it said.

The Bank said it would select partners "via a transparent and competitive process, based on clearly defined selection criteria". Only ideas that have "the potential to be truly innovative" and "relevant to the Bank's mission" will be tested, it said. "Commercial considerations" will also be factored in to the decision-making process.

Companies that participate in the projects could be endorsed by the Bank through client references, the Bank said. It said it could publish the assessments it will make of the work in the projects.

"The Accelerator has already carried out initial work in the areas of data anonymisation, cyber security and distributed ledger technology," the Bank said. "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’s interest is not limited to the topics above; we would also welcome expressions of interest from innovative firms in all areas of fintech that can demonstrate how their work relates to the Bank’s mission," it said.

Expert in financial services and technology Luke Scanlon of Pinsent Masons, the law firm behind Out-Law.com, said: "There is also still a lot of work to be done around the monetary and financial stability implications that various fintech developments will result in. Engaging with Bank of England through an Accelerator will give fintech businesses the opportunity to demonstrate the ways in which technology solutions can be developed in a way that has the potential to improve market conditions by overcoming assumptions about systemic and concentration risks that are sometimes suggested to result from greater reliance on technology in financial contexts."