{"id":44476,"date":"2014-07-02T08:46:00","date_gmt":"2014-07-02T08:46:00","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=422d7744b0b8d95a4ba10620c678b0fd"},"modified":"2014-07-02T08:46:00","modified_gmt":"2014-07-02T08:46:00","slug":"speech-economic-secretary-on-new-financial-technology","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=44476","title":{"rendered":"Speech: Economic Secretary on new financial technology"},"content":{"rendered":"
\n

I\u2019m very glad to be here this morning.<\/p>\n

And I\u2019d like to start off with three quotes.<\/p>\n

One:<\/p>\n

\n

Technology is a word that describes something that doesn\u2019t work yet.<\/p>\n<\/blockquote>\n

That was Douglas Adams.<\/p>\n

Two:<\/p>\n

\n

Technological progress has merely provided us with more efficient means for going backwards.<\/p>\n<\/blockquote>\n

Aldous Huxley.<\/p>\n

And three:<\/p>\n

\n

Computers are useless, they can only give you answers.<\/p>\n<\/blockquote>\n

Pablo Picasso.<\/p>\n

So if you were to listen to some of the greatest wits and writers and artists of the last 100 years\u2026<\/p>\n

You might be tempted to believe that technology is a terrible phenomenon, driving us into some dark and depressing future.<\/p>\n

But then you might read some of the headlines from last week.<\/p>\n

One.<\/p>\n

New technology helps brain signals move paralysed hand.<\/p>\n

Time Magazine.<\/p>\n

Two.<\/p>\n

How technology is being used to foil cheats.<\/p>\n

The Telegraph.<\/p>\n

And three.<\/p>\n

Technology firm creating 31 jobs in Belfast.<\/p>\n

The BBC.<\/p>\n

And I think that those three headlines\u2026<\/p>\n

Capture three of the real opportunities that \u2013 when developed with the right intentions \u2013 new technology can present. <\/p>\n

First. As with the paralysed hand, technology can help people.<\/p>\n

Second. As with stopping cheats, technology can make life fairer.<\/p>\n

And third. As in Belfast, technology can create jobs.<\/p>\n

And it\u2019s exactly those three things that I want to talk about today. <\/p>\n

I want to talk about how the work you\u2019re doing can help people.<\/p>\n

I want to talk about how we can use technology to make competition fairer.<\/p>\n

And I want to talk about how we can use new technology to create and support jobs.<\/p>\n

And within that, I want to talk about the work we in government are doing to help.<\/p>\n

So first, how can financial technology help people?<\/p>\n

Put simply, we need you to keep using the latest technology\u2026<\/p>\n

To ensure that our financial sector works for the people who use it.<\/p>\n

And I think that\u2019s an area where we\u2019ve really seen progress over the last few years\u2026<\/p>\n

With new systems and ideas continually making life easier for your customers.<\/p>\n

We\u2019ve seen the introduction of:<\/p>\n

    \n
  • GoCardless, which makes it easy and cheap for small businesses to take debit payments<\/li>\n
  • TransferWise, which provides people and businesses with a lower cost alternative for sending money overseas<\/li>\n
  • Funding Circle, where people can directly lend to small businesses in their community online<\/li>\n<\/ul>\n

    And I\u2019m sure there are hundreds more inventive products that are making a real difference to businesses<\/p>\n

    I think it\u2019s crucial that you keep developing products like that\u2026<\/p>\n

    That keep making it easier for people to carry out the transactions they want.<\/p>\n

    We\u2019ll keep doing our bit to help. <\/p>\n

    Soon we\u2019ll be legislating for cheque imaging, <\/p>\n

    Which will see customers able to pay in their cheques using their smart phones. <\/p>\n

    And we\u2019re also doing our bit to support the new Financial Conduct Authority (FCA<\/abbr>) project \u2013 Project Innovate. <\/p>\n

    For those of you that don\u2019t know, Project Innovate is a clear signal from the FCA<\/abbr>\u2026<\/p>\n

    That they want to make sure UK financial technology companies \u2013 many of which will be run by people here today \u2013 are supported by our regulatory environment. <\/p>\n

    And as part of the project the FCA<\/abbr> has said it will open its doors to any firm who are developing new approaches\u2026<\/p>\n

    Which either aren\u2019t explicitly addressed by current regulation \u2013 or where the current guidance may be ambivalent. <\/p>\n

    They\u2019re also supporting innovation\u2026<\/p>\n

    First, by providing help to firms who are developing new models or products, so they can navigate the regulatory system. <\/p>\n

    And second, by looking for areas where the system itself needs to adapt to new technology or broader change \u2013 rather than the other way round. <\/p>\n

    These are all really positive developments that the government strongly welcomes\u2026 <\/p>\n

    And they should go a long way towards creating an environment in which firms \u2013 like yours\u2026<\/p>\n

    Can compete, grow and \u2013 most importantly \u2013 keep innovating for your customers. <\/p>\n

    So, second, what can we do with FinTech to make things fairer?<\/p>\n

    For me, the number one priority of my time in this role is to improve competition between companies that provide banking services.<\/p>\n

    Because while there has always been competition\u2026<\/p>\n

    That competition hasn\u2019t always been fair.<\/p>\n

    And one of the big changes we\u2019ve made here \u2013 to help you \u2013 has been in legislating for a new Payments Systems Regulator. <\/p>\n

    Now \u2013 as you\u2019ll all know \u2013 every time someone:<\/p>\n

      \n
    • gets paid directly into a bank account<\/li>\n
    • takes money out of a cash machine that isn\u2019t owned by their own bank<\/li>\n
    • moves money around by some other method<\/li>\n<\/ul>\n

      They are relying on payment systems to get their money to the right place, safely, reliably and efficiently. <\/p>\n

      But the system that\u2019s currently in place, works in favour of the big banks\u2026 <\/p>\n

      Because those are the banks that have always owned the payments systems\u2026<\/p>\n

      Which has always meant that FinTechs had no alternative but to accept the terms they\u2019ve been offered.<\/p>\n

      Often those terms have been unfavourable, which has given those big banks a big advantage over both new entrants\u2026 <\/p>\n

      And companies that want to offer people a different customer experience.<\/p>\n

      But the new regulator will have strong powers\u2026<\/p>\n

      And they will be able to ensure that smaller banks and alternative providers of finance \u2013 including FinTechs – can access these systems in a fair and transparent way.<\/p>\n

      This piece of work is very nearly there.<\/p>\n

      The government has switched on the Market Investigation Reference powers of the Regulator a year ahead of schedule\u2026 <\/p>\n

      And this will give them the power to take competition action over payments systems\u2026<\/p>\n

      When they come into their full set of powers next April.<\/p>\n

      All of which should result in a fairer \u2013 more even \u2013 landscape for your companies to operate.<\/p>\n

      Thirdly, how can we use new technology to create jobs?<\/p>\n

      Vitally – and as a mum myself, I\u2019m particularly interested for my own son, who is desperate to get into this sector\u2026<\/p>\n

      There are a growing number of jobs in financial technology itself.<\/p>\n

      The alternative finance market is expected to be worth over \u00a31.5bn this year, with the potential to grow even further. <\/p>\n

      And one of the ways I think we can help that growth, is by making it an even stronger export industry.<\/p>\n

      According to current estimates, over the next 10 to 15 years\u2026<\/p>\n

      90% of global demand for goods and services will be generated outside of Europe. <\/p>\n

      So we in government think that you in FinTech have a real opportunity to tap into this growth, and take advantage of new international business. <\/p>\n

      Again, we\u2019ll be doing our bit to help.<\/p>\n

      That\u2019s why \u2013 for example \u2013 we\u2019ve created the Financial Services Trade and Investment Board\u2026<\/p>\n

      Which is a strategic body that brings together government and industry\u2026<\/p>\n

      And has been tasked with:<\/p>\n

        \n
      • attracting inward investment<\/li>\n
      • promoting external trade<\/li>\n
      • removing restrictions for the UK\u2019s financial services sector<\/li>\n<\/ul>\n

        And that board has \u2013 you\u2019ll be pleased to hear \u2013 identified financial technology as one of its big priorities.<\/p>\n

        It recognises that the UK is fast becoming a destination of choice for companies that want to establish a global presence in the FinTech sector\u2026<\/p>\n

        And working with UKTI, they have developed a marketing strategy to attract more overseas investment to support the work you do. <\/p>\n

        But the growth and the employment opportunities here aren\u2019t only in your sector.<\/p>\n

        You all have a key role to play in supporting both growth and jobs in other sectors too\u2026<\/p>\n

        Especially by supporting small and medium businesses.<\/p>\n

        We really want to open up the field of SME finance to Fintechs. <\/p>\n

        And this goes back to the importance of competition, because \u2013 at present \u2013 the largest four banks account for over 80% of UK SMEs\u2019 main banking relationships. <\/p>\n

        Such high concentration levels are \u2013 quite frankly \u2013 bad for business. <\/p>\n

        So we are fully committed to fostering a stronger, more diverse and more competitive SME banking sector, in which FinTech firms play a key role. <\/p>\n

        And our work is well underway on this:<\/p>\n

          \n
        • we\u2019re legislating to improve access to SME credit data, which will enhance the ability of new providers to conduct accurate risk assessments<\/li>\n
        • we\u2019re looking at proposals that will match those SMEs that want to secure loans with new market players that want to provide them<\/li>\n
        • we\u2019ve taken action to speed up the process for waivers or deeds of priority, which have made it easier for FinTechs to offer finance to SMEs<\/li>\n<\/ul>\n

          Finally, we want the British Business Bank to keep working with you to unlock further funding for small businesses. <\/p>\n

          Both the Business Finance Partnership, and its successor \u2013 the Investment Programme \u2013 have an explicit objective to support lending to smaller businesses through smaller and more innovative finance providers. <\/p>\n

          They\u2019ve already supported a whole host of providers like <\/p>\n

            \n
          • peer-to-peer lenders<\/li>\n
          • supply chain lenders<\/li>\n
          • debt and mezzanine finance funds<\/li>\n<\/ul>\n

            And their funding has been matched with at least an equal amount \u2013 and usually much more \u2013 from private sector investors.<\/p>\n

            We want companies like yours to keep taking advantage of the opportunities they offer\u2026<\/p>\n

            And to keep offering new and interesting ways of lending to small businesses.<\/p>\n

            Because in very simple terms, the more small businesses we can support\u2026<\/p>\n

            The more jobs we can create\u2026<\/p>\n

            The more growth we can create\u2026<\/p>\n

            And ultimately, the more prosperity we can create for millions of families across the UK.<\/p>\n

            And that\u2019s why I\u2019d like to end this morning by dismissing Douglas Adams!<\/p>\n

            Dismissing Aldous Huxley!<\/p>\n

            And dismissing Pablo Picasso! <\/p>\n

            Because I really do believe that new financial technology:<\/p>\n

              \n
            • will work<\/li>\n
            • will move us forward<\/li>\n
            • will provide answers to some of the issues that have held back our sector<\/li>\n<\/ul>\n

              So if I have one ask of you, it\u2019s to keep doing what you\u2019re doing.<\/p>\n

              Keep looking for new and inventive ways to help individuals and businesses.<\/p>\n

              Keep looking for new and inventive ways to shake up the system, and make competition stronger.<\/p>\n

              Because the outcome of all of that will be a system that works better for people.<\/p>\n

              That is fairer.<\/p>\n

              And that supports jobs.<\/p>\n

              And that\u2019s something that will be great for your sector, and our country.<\/p>\n

              Thanks for listening. <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

              New financial technology will move us forward, says Economic Secretary to the Treasury, Andrea Leadsom.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/44476"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=44476"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/44476\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=44476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=44476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=44476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}