06 October 2017

The Bank of England’s FinTech Accelerator: what have we done and what have we learned? - remarks by Andrew Hauser

In the remarks made to Fintech firms in Cambridge, Andrew Hauser, Executive Director for Banking, Payments and Financial Resilience, reflected on the work of the Bank of England’s FinTech Accelerator since its launch in June 2016.

Andrew also announced the firms the Accelerator would be working with in the latest cohort of proofs of concept (PoCs):

• Chain: This is the latest in a sequence of distributed ledger technology (DLT) PoCs, and is focused on a key tradeoff in DLT design:  ie the extent to which DLT based systems can be configured to enable privacy amongst participants, whilst keeping data on a shared ledger.
• NTT DATA and Reportix: This PoC will explore ways of storing, organising and combining the Bank’s regulatory and analytical data in a more flexible or ‘multi-dimensional’ way based on the XBRL standard, rather than the current ‘form-centric’ (or tabular) format.  Adjusting the storage of data in this way would allow the Bank to make broader connections between the data sets used in its economic and financial stability analysis, help analyse and visualise trends in new and innovative ways, and make it faster and easier to implement new XBRL-based taxonomies in the future, without having to reformat all of the Bank’s databases.
• MindBridge™ Analytics Inc: This firm was part of a previous PoC cohort, using data science and machine learning techniques to detect anomalies in anonymised regulatory data.  This second phase aims to expand those findings to larger and more diverse data, including on market transactions, and a broader range of classification and machine learning algorithms.  
• Digital Reasoning: This PoC will examine the extent to which analysis of large quantities of  weakly-structured textual data on regulated firms available from multiple public data sources can yield insights on intent and sentiment.  The PoC will look at whether those insights are capable of complementing analysis of more formal data reporting to assist the Bank’s regulatory and supervisory teams in their work.

Commenting on the work of the Accelerator since its launch in June 2016, Andrew said: 

“We had two objectives in mind when we began.  First, to improve our familiarity with FinTech products, concepts and firms:  their strengths and weaknesses, their implications for financial markets, and their potential applications in central bank operations.  And, second, to give FinTech firms some insight into the emerging questions and needs central banks might have, as policymakers, regulators and operators.’ 

Since it’s launch in 2016 200 firms have applied to work with the Accelerator, and with the latest projects announced today, 13 PoCs will have been completed in a year and a half.  Those PoCs have focused on four main technologies particularly relevant to central banks:  (DLT), large-scale data storage and analysis, machine learning and cyber security.

Andrew reflected on what the Bank has learned through these PoCs:

“Our work on DLT has helped us start to think through how the financial networks of the future may be able to operate in safer and more efficient ways … Our work on data analysis has thrown light on how we can manage ever larger data sets to monitor the economy and the financial system in real time and draw out patterns that might help us set better policy or spot the next crisis coming before it happens.  And our work on machine learning has helped us take the first baby steps towards engaging with that data in a more interactive way, putting computers alongside our staff to help them form the judgments on which monetary and financial stability depend.”

Andrew concluded by summarising the benefits of the work of the Accelerator to both the Bank and the firms it has worked with:

“Through the Accelerator and the Bank’s broader Fintech work, we have made valuable connections with important parts of the financial and technology sector beyond the regulatory perimeter – relationships that could matter greatly in the years to come.”

Press release

Full speech

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