LONDON (Reuters) – The reserve Bank of india, the opening up of the balance sheet and the payment of the companies, and tech companies such as Facebook, it would strengthen great Britain’s 7-billion-pound ($9 billion), fintech sector, as it faces increased competition from Europe’s post-Brexit.
FILE PHOTO: A man walks past the Bank of England in the City of London, england, February 7, 2019. (REUTERS photo/Hannah McKay/File Photo
The BoE Governor, Mark Carney, has said the Bank will also consult next year on the provision of an “appropriate” level of access to the £ 500 billion balance, the new payment providers, enabling them to be more in line with the major banks, which dominate the payments.
If the BoE approves the move, it would be the first major central bank anywhere in the world non-banks have direct access to the treasury, which has the potential to be attractive to big technology companies to expand into the payments, such as Amazon and Apple.
“The Governor’s commitment to continue to engage with the opening (of the Books), the balance sheet and its access to the payments system, can continue to cement London’s role as one of the leading international fintech hub,” said Margaret Doyle, partner and head of financial services insight at Deloitte.
A Bank analyst, John Cronin, said that the Bank could also take up an insurance policy, as the rapid progress of the technology of the payment of the companies, the dent in the ability of the banks to make enough money as a payment for the companies.
“Probably more than a lot of the long-term, it can be seen as a defensive move, as the banks’ business models were under threat from Facebook’s Scale and the others,” Goodbody analyst, Cronin said.
“You can see how winners and losers emerge.”
Earlier this week, Facebook announced plans to introduce a cryptocurrency, called Libra, which is part of an effort to expand into digital payments.
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The payments make up a major part of the fintech practice, but they are still consistent with the central role played by the bank in the operation of the financial system’s plumbing.
Carney’s comment, along with the Uk’s finance minister, Philip Hammond’s announcement of a review of the payments landscape in order to ensure that the legislation and infrastructure to keep pace with the dizzying array of new payment models.
Currently, the only systemically important firms which will be regulated to the same level as that of the banks in the united kingdom and have been exposed to overnight risks, usually are banks, broker-dealers, clearing houses access to central bank’s balance sheet.
Facebook is a cryptocurrency, plans would have to change in a systemically important financial firm, Carney said.
If a payment has been granted access, you may park in the cash on the Books at night, which means that it would be less risky, and less reliance on commercial banks.
“It allows users to take advantage of the lower costs and increased security with the bank at the central bank,” Carney said.
The british government and its financial authorities are to foster the fintech industry for a number of years, as a result of growth of the sector, which is already more than 60,000 people.
The authorities are anxious to keep Britain at the cutting edge in an increasingly digitalised economy, where electronic payments have surpassed cash.
But in the case of Britain, the European Union, will leave on Oct. 31, fintech companies in London have already expressed this concern, they may be excluded from the EU market in the future, and not to the sites of the block.
UK regulators have been praised by fintech companies, and for their flexibility in allowing new business models to be tested on real clients, early in the morning, but in Berlin, Luxembourg and Paris are vying to attract businesses out of London by giving them access to the EU internal market.
Charlotte Crosswell, chief executive of Innovate Finance, a fintech industry body, said the opening of the new types of payment providers that are on the Books it shows a real coming-of-age moment for fintech.
“We are very pleased that the supervisors are keeping in step with the times, as with this approach, the united kingdom, in the field of financial services innovation, and we were able to keep,” Crosswell said.
Reporting by Huw Jones; Editing by Gareth Jones