Technology will reshape financial services in the next 10 years, much more profoundly than it has in the last 5 years. Sustainability will become an increasingly central focus for financial services as the world strives towards a low-carbon future. Jobs in financial services will transform, with growing skills requirements across multiple domains. Technology, Sustainability, and Jobs are three areas that MAS has focused on intensely in recent years, working closely with the financial industry. Over the last two years, MAS has put out about 70 reports, speeches, and media statements on just these three subjects. Together with our industry partners, MAS facilitates discussions and provides updates, on Technology through the Green Shoots series, and on Jobs through the Growing Timber series. And just three weeks ago, we issued our inaugural Sustainability Report which covered not only the Green Finance Action Plan for the financial industry but also MAS’ efforts to reduce its own carbon footprint and to make the Official Foreign Reserves more climate-resilient. So, important as these three areas are, I will not touch on them today. There will continue to be ample opportunities to talk about them in future. MAS’ FINANCIAL POSITION Before I wrap up, let me provide an update on MAS’ financial performance. The investment return from the Official Foreign Reserves was $ billion in FY2020/21. This comprised: Investment gains of $ billion, mainly from interest income and realised capital gains.
5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  One example is artificial intelligence. Ten years ago, the potential impact of AI and machine learning on financial firms was discussed in niche conferences as one of those things on the horizon. Today, 80% of firms we regulate use machine learning. The increasing use of AI will pose big societal questions – what kind of decisions can AI be allowed to make, how to protect against AI creating and amplifying biases/discrimination. These are debates which go much wider than the international financial regulatory community, but to which we must contribute. And there are also specific financial-regulatory issues that have cross border implications. For example, whether AI systems could contribute to procyclicality and risk amplification, whether and how they should be used in regulatory capital models, and what should be the standards for the appropriate governance and oversight of decisions made by AI. That is just one example. Use of the cloud by financial firms poses similar issues – as does the technology-driven changes that are happening in cross-border payment systems and that present new combinations of risk. The challenges go beyond new technology. Regulators and supervisors are increasingly working together to ensure the financial system is resilient to the risks posed by climate change and the transition to a low carbon economy. The regulatory response to this complex financial stability risk is, rightly, multi-faceted.