5  All speeches are available online at www.bankofengland.co.uk/speeches  5  In their current form, these innovations are simply a new front-end to the banking system where FinTech providers take a slice of customer revenue and loyalty but none of the associated risks. They have generally avoided undertaking traditional banking activities. So for now, absent a substantive change in business models or scale of activities, the FPC is unlikely to want to bring these firms into the regulatory perimeter. 11  The changes to customer relationships resulting from FinTech competition could, however, reduce customer loyalty and the stability of funding of incumbent banks. If this happens, the Bank of England would need to ensure prudential standards and resolution regimes for the affected banks are sufficiently robust to these risks. Figure 2: Financial Services Value Chain and Our Infrastructure  10  For an overview of the changes occurring further along the value chain see: “The promise of FinTech: something new under the sun?”, a speech given by Mark Carney on 25 January 2017, at the Deutsche Bundesbank G20 conference on “Digitising finance, financial inclusion and financial literacy”, Wiesbaden. Available at: http://www.bankofengland.co.uk/publications/Pages/speeches/2017/956.aspx 11 Were any FinTech providers to become systemic in their own right, they could be brought into the regulatory perimeter; this could be under the existing statutory framework for designating systemic financial market infrastructure (FMIs), for example.
When it comes to the question of which payment instruments should become the credit transfer and direct debit schemes used for euro payments in the EU, for me it is obvious that the answer is the SCT and SDD. This is, in fact, the position of the Eurosystem, which was clearly communicated in the seventh SEPA  1  The survey involved 42 European banks in nine countries. See the press release (in German) available at: http://www.bearingpoint.de/PMI_SEPA_081110.pdf  BIS Review 159/2010  1  progress report. Of course, it is one thing to set a goal, but it is far harder to achieve it. However, I am confident that the European Commission will make this possible through a legislative proposal. Despite the debate surrounding the end date in the past few weeks, we should not forget that we all share the same goal: we all want to make SEPA a reality. Of course, SEPA will only be a success story if it goes beyond credit transfers and direct debits. This brings me to my next New Year’s resolution: New Year’s resolution number two: let’s establish the requirements for a competitive cards market Any cards market should meet a number of requirements in order to facilitate competition and efficiency. The principle of separating card scheme management from processing entities is one of the core elements of SEPA that aims to guarantee open access. The SEPA credit transfer and direct debit schemes are built on this principle; it should be applied in the cards market too.