Centre for Finance, Technology and Society

The first is the innovations facilitated by the use of digital technologies - such as artificial intelligence, blockchain, and big data - that underpin developments in the sector which are generally characterised as “FinTech”. Fintech applications are commonly grouped according to functional domain with common categories being: Lending, Neo-Banks, Payments, Wealth Management and Investing, Capital Formation and Financing, Insurance, and Cryptocurrencies. Such classifications tend to focus on consumer facing innovations, but many Fintech products are aimed at providing businesses with innovative and disruptive new services. The Centre will also focus on new forms of cryptographic financial instruments, such as Non-Fungible Tokens (NFTs).

The application of technologies which allow for advances in “RegTech” (using technology to manage and enhance regulatory compliance and procedures) are also germane as is the field of “InsurTech”. The use of technologies, such as Application Programming Interfaces (APIs) which allow for Open Finance innovations is also of key interest to the Centre. Open Finance refers to a set of principles adopted by the industry to allow for access to and sharing of customer data to facilitate the development and provision of a broader and potentially more personalised set of services to consumers and other users.

The next main theme concerns regulation and policy, including a focus on people and place and ethics and security. In regulating the Fintech area, a balance needs to be struck between providing a reasonable consumer protection and financial stability and welcoming and encouraging innovation in the financial sector. Appropriate regulatory architecture and related system-level policies are key in attracting FinTech ventures. This translates to investment and talent flows, which are critical components for a country becoming an international FinTech hub. However, regulation must balance such objectives with that of ensuring the best possible outcomes for consumers.

A related theme broadly captured by regulation and policy is “place and people”. With regards to place, domestically much as been made of the importance of having recognised Fintech centres which do not necessarily map on traditional financial centres. Internationally, ensuring that the UK attracts and retains individuals and firms focussed on aspects of financial innovation is a key policy objective. The role of Fintech in different parts of the globe, given vastly different starting points in terms of existing infrastructure and political realities, is also a consideration. Finally, in terms of people, ensuring that the UK has sufficient digital literacy generally, as well as the skills and competencies to underpin a successful and internationally competitive FinTech sector is of crucial importance.

The Centre is also concerned with the many ethical implications of digital technologies and in particular artificial intelligence, machine learning and automated advice in terms of fairness, accountability transparency and trust. The safety and security of citizens and society remains a concern as financial innovations and related technologies may leave consumers and other users vulnerable to loss of funds and/or large amounts of personal and financial data. Many have concerns that individuals do not fully understand the implications for their privacy when using such services.

The final main theme covers topics such as consumer attitudes and behaviour, strategic considerations and innovation and inclusive and sustainable finance. Notwithstanding that many of the Centre’s areas of interest have implications for consumers, an overt focus on consumer attitudes and behaviour helps provide an in-depth and nuanced understanding into consumers’ willingness to adopt new technologies, their attitudes to risk and security concerns, data and ethical considerations as well as perceptions of the fairness or otherwise of products based on the increased use of artificial intelligence and related technologies. The antecedents, characteristics and consequences of trust in providers, the financial system in general and emergent technologies and approaches such as blockchain, AI, Open Finance and new financial instruments such as NFTs are also a key area of interest.

Given consumer attitudes and preferences, the regulatory landscape and competitive situation, firms face the challenge of crafting and implementing entrepreneurial and innovative strategies to ensure that organisational objectives are achieved. Existing incumbents will be concerned with protecting market positions and meeting challenges from potential FinTech start-ups and new entrants, whilst the latter will need to consider which markets to enter and/or disrupt, the method of market entry and how they might compete effectively in those markers.

Finally, the potentially important role of financial technologies in promoting the further development of Sustainable Finance, including financial inclusion, and the intersection of these two topics will also be explored under the auspices of the Centre.