A taxi driver protests in front of city hall against the Uber ridesharing car service in Toronto December 9, 2015. A top official at the Bank of England says central banks need to embrace technology and change with the times or risk disruption akin to what Uber has done in the taxi industry.
Andrew Hauser, the Bank’s executive director for banking, payments, and financial resilience, told the audience at the SWIFT Business Forum event in London on Wednesday: "The change is going to happen whether we like it or not. We have to ensure we adapt as well. If we don’t do so, effectively we might not be able to do our jobs. Central banks, just like everyone else, can’t afford to be Uber’d."
Hauser was referring to the wave of tech-driven innovation that is currently sweeping through financial services, usually referred to as fintech. Startups unencumbered by legacy systems are offering cheaper and quicker services to consumers.
Uber has also been particularly effective in the US at bending regulators to its will ( there’s a good explanation of how here ). A big criticism of transport regulators from traditional cabbies is they’ve failed to keep a handle on the pace of change in the industry. Hauser doesn’t want that to happen in financial services, so is keen to keep a close eye on developing fintech players.
Some fear that these new business models, while delivering short-term bonuses for many consumers, could pose long-term risks by creating new systematic risks that central banks have yet to fully grasp. The World Economic Forum on Tuesday highlighted the risk of consumers being left with big losses at the hands of peer-to-peer lending , for example.
But Hauser told the conference: "It’s often the case when you meet central bankers, they instinctively say I don’t like it, […]
