Embracing the promise of fintech

Quarterly Bulletin 2019 Q1
Published on 22 March 2019

Irina Mnohoghitnei, Simon Scorer, Khushali Shingala and Oliver Thew of the Fintech Hub.

  • The UK economy is becoming increasingly digital with high levels of smartphone and internet penetration, a growth in e-commerce, the emergence of new technologies and an enhanced ability to capture and analyse large amounts of data.
  • Fintech is supporting this shift by enabling new players and business models to enter the market. This could increase competition, meet unfulfilled customer needs, reduce inefficiencies and change financial services. Overall, this could create a more efficient, effective and resilient financial system. At the same time, new risks to financial stability may emerge and existing risks could be amplified. 
  • The Bank of England’s mission is to promote the good of the people of the UK by maintaining monetary and financial stability. As such, it seeks to understand what fintech means for the stability of the financial system, the safety and soundness of financial firms, and its ability to perform its operational and regulatory roles. 
  • The Bank of England is committed to embracing fintech to deliver its mission. As such, it is upgrading its hard infrastructure — particularly its payments architecture — to enhance security and support innovation, while also updating its ‘soft infrastructure’ — including rules and regulations — to mitigate potential risks. The Bank of England is also applying new technology to enhance its own capabilities.


The word ‘fintech’ is simply a combination of the words ‘financial’ and ‘technology’. It can be defined broadly as technology-enabled financial innovation that could result in new business models, applications, processes, or products with an associated material effect on financial markets, institutions and the provision of financial services.

Although ‘fintech’ is a relatively new term, technology has always been important in the financial sector. The key difference now is that the pace and impact of change across the financial system has increased markedly over the past decade. Globally, more than 33% of the digitally active population now use fintech services, more than doubling from 16% in 2015.

To embrace the potential of fintech the Bank of England is:

Understanding how fintech developments may affect systemic stability

Evaluating how fintech developments may affect the safety and soundness of firms

Applying fintech, where appropriate, to enhance our capabilities

This page was last updated 09 June 2020

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