Indeed, more data was created in the past two years than in all the years that came before.5 And this data is creating enormous opportunities for the new finance to serve customers better and to manage risks more effectively. To those ends, the financial sector is investing heavily in the Cloud, Machine Learning and AI. Banking is already the second biggest global spender on AI systems (after retail) and is expected to invest a further $ on AI by 2020. AI-enabled solutions are increasingly important in fraud detection as well as automated threat intelligence and prevention. As some in the audience are exploring, there is also significant potential in credit assessments, wholesale loan underwriting and trading. As my colleague James Proudman recently described, such advanced analytics are also likely to lead to changes to the way the Bank conducts supervision.6  3  Supervisory Statement 3/19. Available at: https://www.bankofengland.co.uk/prudential-regulation/publication/2019/enhancing-banksand-insurers-approaches-to-managing-the-financial-risks-from-climate-change-ss 4 Network for Greening the Financial System; First Comprehensive Report 17 April 2019. Available at: https://www.banquefrance.fr/en/financial-stability/international-role/network-greening-financial-system/first-ngfs-progress-report 5 See https://www.domo.com/solution/data-never-sleeps-6 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  The PRA promotes safety and soundness based upon forward-looking, judgement-based supervision, in which we identify the key risks facing firms and set supervisory strategies to mitigate them. As a process, it can be broken down into three simple steps: 1) rule-setting and reporting; 2) analysis and monitoring; and 3) setting and communicating a supervisory strategy to mitigate identified risks. Each of these aspects of supervision is amenable to automation, machine learning or AI to some extent.
And the recovery of the euro – including its recovery against sterling – will help to ease the severe imbalance within our own economy between the domestically-orientated sectors which have typically been doing relatively well and those businesses and sectors that are most exposed to competition from the Eurozone and which have been having a rough time. That imbalance is, I know, a real concern up here north of the border, and it has more generally for some time been one of the most difficult issues confronting us in conducting monetary policy. But there are, of course, also major domestic uncertainties. What – as I have often explained before – we are seeking to do through monetary policy – in order to achieve the Government’s inflation target – is to keep overall nominal demand growth more or less continuously in line with the supply-side capacity of the economy to meet that demand. That is a necessary condition for maintaining our steady economic progress. But we cannot directly observe supply-side capacity in either product or labour markets, nor therefore anticipate just how it will develop, with any great precision, nor do we know precisely what is currently happening or is likely to happen to the rate of growth of aggregate demand in the economy anyway. Our forecasts and policy judgements are based upon very careful scrutiny of all the latest data available to us, informed by the best technical analysis we can muster.