In my view, this absence of academic debate and challenge contributed, in no small measure, to international prudential standards being set at levels which were, with the benefit of 20/20 hindsight, not just too low but ridiculously too low. We must not repeat that same mistake. 29  Results from a poll conducted by Populus for the Bank of England in March 2016 of around 2,000 adults. 30  Douglas (1945). 31  For example see Bailey (2015) on prudential regulation, Cunliffe (2015) on macroprudential policy, Carney (2015) on markets and Bank of England (2016) on buy-to-let underwriting standards. 32  Bank of England Systemic Risk Survey 2015 H2, available at: http://www.bankofengland.co.uk/publications/ Pages/other/srs/srs2015h2.aspx. 33  Armstrong and Davis (2016). BIS central bankers’ speeches  7  So academic challenge, challenge which causes policymakers to think, and possibly rethink, their calibration of prudential standards, is an essential ingredient of a healthy financial and regulatory system. The academic debate about prudential standards for banks is not closed; it has only just opened. And one of the Bank’s public policy responsibilities is to help nurture that policy challenge. Indeed, this was one of the prime motivations behind the Bank’s new research agenda, launched last year. Third, there is a clear and obvious complementarity between improved prudential standards for banks and protecting bank customers. Since January 2011, UK banks have paid out more than £ billion to customers in redress for mis-sold Payments Protection Insurance (PPI) alone. 34 These are astonishingly large sums.
Regulators around the globe are very mindful of this trend and are willing to take calculated risks on innovative ventures, going beyond the banking system for solutions. There is thus, a more level-playing field and more business opportunities for non- traditional companies that are responsive and effective in meeting the financial services needs of consumers. For example, new robo-advisory businesses are now providing high quality investment advice at low cost, while payment technology companies are making cross-border payments cheaper, 1/5  BIS central bankers' speeches  quicker and more efficient. TransferWise, a cross-border payment company is now moving to offer ‘borderless’ bank accounts for businesses that operate across border. This is a challenge for many incumbents. The second observation is that data could be the ‘king-maker’ of finance. Companies that are able to control and leverage on data to deliver superior customer experience will possess the greatest advantage. Successful startups over the past decade such as AirBnb, Grab, Snapchat and Uber have all utilised technology and data to improve business models and customer interactions. For the financial sector, this could potentially mark a highly interesting shift of mantra in the future from “cash is king” to “data is king”. The arms race of the 21st century is really big data. Firms on Wall Street and the City of London are now employing data scientists en masse. They are the new breed of ‘bankers’. The bankers of the future.