On Friday 1st February 2013, The Finance Innovation Lab will host a small workshop bringing together some of those innovators trying to bring diversity and sustainability to the finance system.
Policymakers and thinkers will work together on proposals of how to open up finance to greater competition and new business models.
We’re delighted that Andy Haldane, from the Bank of England, will be there to offer his insights, alongside economist & author, Diane Coyle and Professor Richard Werner.
The aim of the event, is to build on the debate we had at the successful Peer-to-Peer Summit, in December 2012. We will look at the barriers facing prospective new banks as well as the peer-to-peer lending and crowdfunding worlds. We will also try to move thinking on from identification of barriers, through what types of policy intervention are required, and into how we collectively make this happen.
The majority agree that a more resilient financial system, based on greater diversity of providers and business models is more desirable than the current one, dominated by huge, global, universal banks. But the questions of how we get there from here are only beginning to be addressed in mainstream politics and economics.
The Parliamentary Commission on Banking Standards is now seeking evidence from the alternative finance sector on these questions. Zopa, New Economics Foundation, Tusmor and BuzzBnk were all giving evidence only this week.
Baroness Susan Kramer, is leading for the Commission on the topic and has a very strong commitment to open up the market to new, socially useful, innovation. We hope she can take the rest of the Commission with her. We will use to findings of the workshop to inform a Finance Innovation Lab submission. It will look at four major areas in need of reform:
1 – addressing the regulatory barriers for new entrants into banking, particularly small ones, such as capital requirements or the length of the approvals process;
2 – taking a look at any unfair market advantages that large incumbent banks enjoy, such as access to the payments system, tax breaks, or implicit subsidies for being ‘too big to fail’;
3 – using government policy or endorsement to help build consumer confidence in new financial products or providers; and
4 – finding ways in which regulators and policymakers can embrace and encourage socially useful innovations and new business models in finance.
The workshop is the start of a year long Finance Lab project on Enabling a New Financial System, with support from Friends Provident Foundation.