Andrew Bailey clears up Bank of England’s AI stance

Bank of England

Although acknowledging that AI poses some risks, the ‘great benefits’ the rapidly developing technology can bring must be recognised, Andrew Bailey informed the BBC.

AI has been taking fintech and financial services by storm this year, with various stakeholders highly optimistic about the technology’s potential for both sectors.

The government too is keen to see AI develop as a core segment of British industry, with both PM Rishi Sunak and Chancellor Jeremy Hunt keen proponents of the UK technological sector.

However the UK’s central bank was seemingly a bit more hesitant when it came to accelerating adoption of the technology, singling out AI – along with machine learning – as areas for further review.

Commenting at the time, Bailey explained that the complexity of AI was the main area the Bank’s Financial Stability Committee (FSC) would probe. However, in his recent discussion with the BBC he emphasised the importance of progress.

“I’m an economic historian, before I became a central banker,” he informed the BBC. “Economies adapt, jobs adapt, and we learn to work with it. And I think, you get a better result from people with machines than with machines on their own. So I’m an optimist…”

His comments to the UK national broadcaster come at a time when UK fintech is making the case to the government for further investment and support for the country’s burgeoning AI sector.

Earlier this week, representatives from Basware, Delta Capita and Ataccama spoke to the Parliament Street think-tank, chaired by Dean Russell MP, praising the emergence of AI as a ‘game changer’ for British finance.

Meanwhile, various major stakeholders in both the UK and international payments and fintech scenes continue to incorporate AI. Mastercard upped its use of the tech for fraud this morning, whilst NatWest emphasised how it will continue to evolve payments in 2024, speaking to Payment Expert in December.

Concerns around the sector still remain, there is no doubt of that. There are concerns about the impact of jobs, concerns about legal and copyright claims, and among some, of the danger of AI becoming perhaps too intelligent.

However, it is clear that the government, financial sector and Bank of England are all keen to realise and seize the opportunities AI can bring to the economy. The main task going forward will be carefully managing and planning this course of action.