10 See https://www.bankofengland.co.uk/payment-and-settlement/chaps for more information. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  start thinking now about the opportunities that the UK’s implementation of ISO 20022 – and the CCM – may unlock in 5 to 10 years’ time. Legal Entity Identifiers To seize the opportunities for future improvement, we need to examine where there might be existing inefficiencies. Huw Van Steenis is currently leading a major project in the Bank, Vision 2030, to map out what the future of the financial system might look like and the role the Bank can play in making the system as effective as possible for households and businesses in the UK. One of the themes that comes up repeatedly in our engagement is that the burden of identification is heavy – both for banks and businesses. All but the simplest of business transactions involve a chain of institutions in the financial network. Across this chain there can be many unique ways of identifying a business, and because of that, there are manual checks and reconciliation processes involved every step of the way. A single, universally recognised identifier could dramatically improve the speed and efficiency of identification, by cutting out this manual process at every stage. Which brings us back to the Legal Entity Identifier (LEI). The LEI has its origins in the post-crisis financial market reforms pioneered by the international policy-setting and regulatory community11, serving as a means to better aggregate and monitor exposures (amongst many other goods) ultimately helping us preserve financial stability.
The decisions that we make affect the whole economy, and ultimately serve the good of the people of the United Kingdom. And, making these decisions effectively relies on good data. This isn’t new: the Bank has been collecting data in one form or another since its foundation in 1694. But while data have always been important, the pace of change in technology has unlocked much greater potential. Across public and private sectors alike the possibilities of leveraging data on a massive scale or in innovative ways are being explored – in health and consumer tech, in finance in the form of fintech, and regtech and suptech for regulators like the Bank.1 As well as providing new opportunities for individual firms, the use of data in fintech – to better price and allocate capital and to monitor the uses to which it is being put – has the potential to support productivity growth across the wider economy.2 3 It is often said that “data is the new oil” fuelling a new industrial revolution. While the transformational potential is similar, there are differences from oil which mean that the nature of that revolution will be very different. Unlike oil, data are “non-rivalrous”, meaning more than one person can use the same piece of data at once. Once in the public domain it also becomes by definition “non-excludable”, meaning you can’t control who does and doesn’t have access.