This evidence suggests it is far better to be born rich and stupid than bright and poor. Moreover, these early-stage differences in educational attainment, shaped by socio-economic background, have a life-long impact. That is why there is a very high degree of intergenerational persistence in incomes and wealth, even once account is taken of ability. As one diagnostic on that, consider the following evidence, courtesy of the Commission on Social Mobility and Child Poverty: although independent schools comprise only 7% of pupils in the UK, the independently-educated comprise over 70% of the upper echelons of the judiciary, 55% of permanent secretaries in the civil service and 62% of senior armed forces officers. 70 Branching of the opportunity tree starts early, it appears, and then keeps widening. At present, as with cognitive diversity, there is often a lack of recognition of these inbuilt socioeconomic biases. And, as with cognitive diversity, one reason for this lack of recognition is a lack of measurement. There is no agreed set of metrics for measuring someone’s socioeconomic background. In the UK, the Social Mobility and Child Poverty Commission has begun to develop some metrics. But there is widespread recognition that we are still in the early stages of measurement. Measurement would enable organisations to draw their own experiential diversity maps. As with cognitive diversity, beyond that there is potentially value in making transparent those maps to provide incentives for purposive action if experiential diversity is found to be wanting.
A number of other countries have committed to a new, global standard ISO20022; in the UK the Bank of England and Pay.UK have committed to introduce it for CHAPS and Pay.UK’s retail payment systems, via the introduction of the Common Credit Message, helping to integrate a common language for global payments data in the UK’s payment systems16. I’m sure many of you recognise the ISO20022 from the ECB’s Target2-Securities and Target Instant Payment Settlement17 . In doing this the Bank has also committed to making Legal Entity Identifiers a mandatory component of its financial institution to financial institution CHAPS messages, and can see great value in also extending use of Legal Entity Identifiers (LEI) to a wider range of transactions in the longer term. I’m sure many of you are familiar with the LEI, as part of MiFID II transaction reporting. As well as being a valuable financial reporting tool, we believe the LEI could be a building block for further innovation, delivering wider economic benefits for end users of financial services – increased usage could raise efficiency, competition and productivity18. As well as the benefits that come with international harmonisation, greater flexibility, and richer payments data, there are gains to be had for system-wide resilience. Using the same messaging standard across many payment systems will help to facilitate the re-routing of payment messages, reducing the impact of system outages.