A lot of good news for FinTech, especially in the UK, but also a lot of reading about the regulation of AI in the EU – that’s in a nutshell, more detail is below in this week’s edition of the FinTechnologist Weekly:
Hope, Cooperation and Crackdowns
A Boost for UK FinTech?
The UK’s chancellor has set out new plans to help FinTech firms and ensure the country remains at the cutting edge of digitalising finance following the adverse effects by both Brexit and the Covid pandemic. According to a Treasury announcement and following an interview with Rishi Sunak, the proposal circles on three key elements, namely the new FCA ‘scale box’ and Centre for Finance, Innovation and Technology to boost growth; the UK to lead digitisation of finance with central bank digital currency taskforce and support for new technologies and infrastructures; and additional plans for capital markets reform to enhance open and dynamic financial centre.
At the same time the FCA’s CEO, Nikhil Rathi, said at a speech at FinTech Week that the regulator will be taking forward the Kalifa Review’s recommendation for a scalebox, including the creation of a regulatory nursery, which aims to create a period of enhanced oversight as newly authorised firms develop and grow used to their regulatory status.
Climate and Sustainability
The U.S. is trying to undo the damage done to its climate credibility in recent years as
President Biden promised at the climate summit last week to double US international climate finance by 2024 and triple funding for adaptation to tackle the climate crisis. Much more needs to be done and not only by the USA as could be seen at the summit.
Elsewhere, the EU has been busy for a while pushing for sustainable finance ever since the announcement of its ambitious action plan. It has now adopted a package of measures to help improve the flow of money towards sustainable activities across the Union that consists of EU Taxonomy Climate Delegated Act aims to support sustainable investment by making it clearer which economic activities most contribute to meeting the EU’s environmental objectives; a proposal for a Corporate Sustainability Reporting Directive; as well as a number of additional measures.
If you want to know more about the connection between economic overheating and climate change, I’d recommend you read the BIS paper of the same name that came out last week. Without giving too much away, the authors find that carbon emissions rise with economic development, manufacturing activity, urbanisation and, increasingly, economic growth, but you would have suspected that, wouldn’t you? The real value of the paper is naturally the evidence and the explanations of is, so give it a look.
Blockchain, Fraud and Luxury
Blockchain technology keeps pushing for those use cases that confirm its potential in real life (other than cryptocurrencies and NFTs) and in some interesting news this past week, LVHM, the luxury giant, has confirmed that it has joined forces with its competitors Prada and Richemont’s Cartier to „offer a blockchain solution to their customers seeking an extra seal of authenticity for the goods they’re buying“. Luxury brands lose billions of dollars each year due to counterfeits and the amount of lost revenues has been rising for a number of years. It wasn’t exactly saying how they are going about it and whether it is only a cosmetic solution or will really drive change, so I’m curious to find out more. Stay tuned.
The Regulation of AI in Europe
And, as they say, last but not least some very important news, again from the European Union. Somewhere between the conflicting predictions of experts on the matter of artificial intelligence (you know, people like Elon Musk and Mark Zuckerberg), there seems to be some consensus that something needs to be done about AI and how we use it. The EU’s approach is now set out in its Proposal for a Regulation laying down harmonised rules on artificial intelligence, short Artificial Intelligence Act.
The communication says that “faced with the rapid technological development of AI and a global policy context where more and more countries are investing heavily in AI, the EU must act as one to harness the many opportunities and address challenges of AI in a future-proof manner. To promote the development of AI and address the potential high risks it poses to safety and fundamental rights equally, the Commission is presenting both a proposal for a regulatory framework on AI and a revised coordinated plan on AI“. I admit to not having it read entirely yet, but don’t worry, since it surely is only the first step, which will very likely be followed by a number of discussions, changes and more discussions, but it’s a start, I suppose.
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That’s all for this week but ff you have an interesting story or would join me on the podcast, connect on Twitter.
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