The Bank of England has outlined its approach to delivering the environment necessary to ensure that responsible innovation flourishes, setting out the work it has done, and will do, across AI, distributed ledger technology (DLT), and quantum computing.

It says that AI, DLT, and quantum computing could be the most transformative technologies of our time, with the potential to reshape the UK economy and boost productivity. In turn, productivity growth can raise real wages, living standards, and overall economic growth. The financial services sector has a critical role to play, both as an adopter of these technologies and as a facilitator enabling firms across other sectors to do so.

The scale of change driven by technological innovation will affect all the work the Bank of England does – from setting interest rates, to maintaining financial stability, to operating the UK's core payments infrastructure, among others. It says that it cannot be sure about which technological innovations will flourish and when but, as the UK's central bank, it needs to understand how these technological changes affect its remit, while also enabling the financial services sector to adopt these technologies safely. It says that "responsible" innovation does not mean that won't be any risk, but it needs to be managed. 

The Bank says that technological innovation can deliver sustainable economic growth, make the financial system more effective and resilient, and improve how it carries out its role. Successful innovation needs a strong foundation, which the Bank can deliver through a resilient financial system with robust standards. The private sector is best placed to drive innovation, but the Bank has a role in shaping it. The report outlines the broad toolkit (see image) at the Bank's disposal to create this environment.

The Bank's approach aims to support the UK government's vision for the UK to be the world's most technologically advanced global financial centre.  Given the rapid pace of technological innovation, it will share its thinking, provide thought leadership on responsible innovation, and collaborate to deliver its work. Ultimately, its aim is to ensure that the people and firms of the UK benefit from technological innovation, ensuring it sustainably supports economic growth, while also continuing its work on mitigating potential risks arising from these changes.