Amendments to the Financial Services Bill will empower FinTech to drive our economic recovery
My amendments seek to improve lives for the most financially vulnerable, as well as supercharging a successful UK industry.
The Financial Services Bill is currently making its way through committee stage in the House of Lords.
Described by the economic secretary to the Treasury, John Glen, as a ‘portfolio bill’, it contains many important points. We have an opportunity to ensure that when it leaves the Lords, it is more portmanteaux than portfolio.
This Bill can carry a lot more, not least in respect of the promotion of financial inclusion, Fintech and establishing a government centre for financial innovation. I have put forward twenty-seven amendments and put my name to several more.
One of the most important areas we can address is financial inclusion, ensuring that individuals and SMEs have access to the financial services they require. I have put forward an amendment that would add a financial inclusion objective to the remit of the Financial Conduct Authority.
Another amendment would place a similar requirement on the Financial Policy Committee of the Bank of England, to monitor exclusion from financial services in the UK and report to Parliament with the results.
I have also proposed a review of financial inclusion that would assess current credit rating systems and the role of financial technology in offering solutions. It is vital that the Bank of England, regulators, financial services authorised firms and all of us play our part if we are to financially include, enable and empower across the piece.
Several of my amendments explore the potential uses of Fintech, Artificial Intelligence (AI) and Distributed Ledger Technologies in a variety of financial services contexts.
One of the most important areas we can address is financial inclusion
I have included a responsibility to report on how financial technology solutions are improving financial inclusion and have also proposed specific amendments, such as a requirement for the ethical use of AI by companies in the financial services sector.
Another amendment would ensure that companies operating in the financial services sector who use AI must have a designated AI officer, who would have a responsibility to ensure the use of AI is “safe, fair, unbiased and non-discriminatory.”
I have tabled an amendment that would require the secretary of state to consider a pilot regime for financial services market infrastructures based on distributed ledger technologies.
Another deals with digital ID, pushing the government to publish plans for the development and deployment of a distributed digital identification for individuals and corporate entities in the financial services sector.
Finally, it is clear we require a centre – a dynamo – at the heart of the Treasury, which can take forward the future financial services agenda. The recently published, government commissioned review of FinTech makes some excellent recommendations but we need to ensure they are implemented.
My amendment 125 proposes a UK Centre for Applied Innovation in Financial Services that would do just that, together with exploring the breadth of the ‘fourth industrial revolution’ landscape including the Central Bank Digital Currency (CBDC) opportunity.
We have this bill in progress right now. The Lords have been described as ‘parliamentary worms’ due to the way we seek to improve legislation, line by line, clause by clause.
We can make these changes, unleash the potential and enable FinTech to be a key driver for the recovery. Or, we can wait, wonder, and end up realising we urgently need a Financial Services Bill No.2.
I urge the government to consider these amendments and take the opportunity to improve lives for the most financially vulnerable as well as supercharging a successful UK industry.
Lord Holmes is a Conservative member of the House of Lords and co-chair of the APPG on Fintech.