This would provide a foundation that is both more resilient and has lower barriers to entry; helping private sector innovation to flourish. To achieve these goals, we are reviewing our data strategy to ensure we embrace new technology. We have already started work to deploy proof of concepts to see what potential benefits AI/ML could have for identifying regulatory issues. We are also looking to make our regulatory rulebook machine-readable, providing a platform on which firms can develop innovative methods to ensure their compliance. This principle of openness does not just apply to operational matters. We also need to reflect on the appropriateness of our rules and regulations for the digital economy. For example, traditionally only large banks could be a participant in the UK’s High Value Payments System. We reviewed this rule given changes in the digital economy and the maturity of non-bank payment providers – we now have five such non-banks who have direct access to settlement accounts at the Bank of England. These changes increase competition but have been determined with a strong focus on appropriate safeguards. Similarly, next year, we are holding a consultation on widening access to our balance sheet, to gather evidence on whether this could further support competition and stability in the UK financial sector. I have spoken about how fintech offers possibilities for more openness, and more integrated markets at a national level.
We believe improving our credit provision infrastructure in this way can improve credit allocation and support firms to get the credit they need to grow, primarily by reducing information asymmetry between the creditor and the lender. Typically in the UK, it is only an SME’s bank that has ready access to the data needed to price a loan. This makes it difficult for firms to shop around and get the best rate. Our approach 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  prioritises using technology to more accurately and competitively identify creditworthy borrowers, as a means to increasing aggregate credit flowing to SMEs. Open to changing the way we work  My third theme is the importance of the Bank of England being open to changing the way we work. Of course, it is not just the private sector who should be embracing change. We, as central banks, need to reflect on our own way of working. In particular, if we are going to regulate the digital economy effectively we will need to equip ourselves with appropriate digital tools. Central Banks ingest and analyse huge volumes of data in the course of our regulatory activity. This is necessary for our surveillance, but comes at a cost to the firms we regulate. The bill for regulatory reporting in the UK is estimated at between £ and £ a year. We want to leverage modern technology so that the way we collect and analyse data becomes cheaper, faster, and more effective.