Jon Cunliffe: The shape of things to come - innovation in payments and money

Speech by Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, at the Innovative Finance Global Summit, London, 17 April 2023. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for inviting me here today to talk about the 'shape of things to come'. I want to concentrate my remarks today on payments and money – how we pay for things and what type of money we use. These once dusty and forgotten corners of the financial system have been transformed in recent years. And there are good reasons to believe that even more radical change is on the horizon.

I will talk today about developments within in the UK, but much of the trends and the possibility of further technological advances that I will cover are relevant for cross-border payments which have lagged far behind the developments we have seen in recent years in domestic payment systems. And which merits a speech all of its own.

I should start however with a health warning. Central bankers are very used to forecasting the economic future. It is at the heart of what we do. And I can say from experience that, despite the masses of data and our complex mathematical models, it is not an easy task. The future, as the last few years of pandemic and war have shown us, rarely behaves as it should.

However, forecasting the direction and pace of technological innovation - and, crucially, the way it will interact with social and economic trends - is an even more hazardous enterprise. Much lauded innovations prove to be dead ends or fail to be adopted. Unheralded ones emerge at speed. And often it is the unforeseen combination of a number of technological advances that generates radical change.

Against that background, public authorities, like the Bank of England, that are charged with maintaining financial stability and with the regulation of the financial system need to be forward looking, for two key reasons.