Last week, I represented the British government on a trip to Singapore.
I was there to celebrate 60 years of partnership between our 2 countries.
And drum up investment into British technology.
It was my first time in Singapore.
And it struck me that it’s a place that has mastered the art of reinvention.
From traditional fishing village to global financial centre.
Small trading post to one of the most competitive economies in the world.
An economy that, like ours, knows that the key to staying competitive is being squarely focussed on the future.
It’s a similar idea that brings us together today.
Because this is a sector that’s also defined by an ability to reinvent itself.
Where centuries-old banks have had to rip up the playbook.
To compete with nimble, digital-first firms.
And where new technologies have made the way you work unrecognisable from how it once was.
One of my first proper jobs was in a finance team.
It was 1989, and I worked in the purchase ledger at The Body Shop – a hero of the British high street at the time.
I matched goods that came in with invoices.
And inputted all of that into an arcane mainframe computer.
I’m sure quite a few of you will remember those days.
And the change after change you’ve seen your institutions through since.
Because before PIN codes, there was paper.
Before blockchain, there were books of accounts that landed with a thud on the desk.
Before cashless, there was ‘Cashier number 3 please’.
These are changes that financial services firms have not just weathered, but pioneered.
To keep this sector as the engine of economic growth it truly is.
And to keep creating products that improve the lives of working people.
Over the past few years, another change has rippled through the sector:
AI has reshaped what’s possible.
And there’s not a sector of our economy it will leave untouched.
There’s a simple difference between this change and those that came before:
Sheer speed.
In past waves of transformation, industry and the state alike could afford to dip a toe in.
To spend a few years seeing how the water feels.
This time, we need to jump.
Since joining government, I’ve been clear that the UK will not be swept along as others lead the AI revolution.
We’ll shape that revolution here.
6 months ago, we launched the AI Opportunities Action Plan.
Setting out how the UK will seize the massive potential for economic growth that AI offers us.
Growth that’s at the heart of our Plan for Change.
Since that launch, we’ve opened up applications for areas in the UK to become AI Growth Zones – hotspots of AI infrastructure and investment.
And had over 200 responses.
The full weight of government is behind the plan.
With the Chancellor announcing £2 billion to deliver it, as part of the Spending Review.
And a Modern Industrial Strategy that doubles down on our commitment to AI…
…as one of the 6 frontier technologies our digital and tech sector plan focusses on.
Crucial to that plan is adoption.
Because talking about the power of AI to grow the economy is all well and good.
But unless companies use it, that growth only exists in theory.
Not in practice.
Financial services is at the front of the pack here.
Around 3 quarters of firms surveyed by the Bank of England the Financial Conduct Authority (FCA) already use AI.
That’s the 3rd highest rate of adoption across the economy.
That doesn’t surprise me in the slightest.
The UK led the world in open banking.
We led the world in near-instant digital payments.
And our reputation in fintech is second-to-none.
The most valuable private tech company in Europe is Revolut, a British fintech.
Our fintech crown is one I’m infinitely proud of.
If we’re to hold on to it, you need a government that continues to back you.
That doesn’t just call for you to keep exploring new technologies.
But actively enables you to do it.
When I talk to firms about adoption, they tell me about 2 barriers more than any other.
A lack of skills.
And finding their way through a web of complex regulation.
On skills, we’re partnering with 11 major tech companies to train 7.5 million workers in the UK with essential AI skills by the end of this decade.
So that a lack of expertise will never put a ceiling on what you can do.
Regulation shouldn’t be that ceiling, either.
In her Mansion House speech last year, the Chancellor set out a vision:
For a regulatory environment that cares about managing the burden we put on businesses.
Since then, she’s launched a radical action plan on regulation to kickstart growth.
My part in that is making sure we ease the burden on businesses when it comes to adopting emerging tech.
About 9 months ago, I launched the Regulatory Innovation Office.
A dedicated unit to curb red tape.
And get game-changing tech into the public’s hands quickly and safely.
It’s already delivered results.
Apian, a British start-up founded by NHS doctors, is now freed up to use drones to take blood samples from Guy’s Hospital in London Bridge, over to a lab in St. Thomas’ for testing.
Before the NHS had the okay to work with them, those samples were carted over in vans.
The journey took around half an hour.
More if they were snarled up in traffic.
After support from Regulatory Innovation Office (RIO) and the Civil Aviation Authority (CAA), each delivery now takes just 2 minutes.
Beds are freed up faster.
NHS waiting lists go down.
And a crucial difference is made for patients where every second counts.
Thanks to RIO’s close work with regulators, companies have made advances like these in fields like space or engineering biology, too.
But I want more sectors to benefit from the breath of fresh air it offers.
Instead of being stifled by a blanket of bureaucracy.
So, today, I can announce that RIO is joining forces with digital regulators.
To consolidate a labyrinth of regulation, and make it easier for innovators to bring AI products to market quickly and easily.
This marks a significant boost for fintechs.
Right now, your efforts to use emerging tech can get mired in a lack of clarity.
Because there’s no single port of call on what you can do with AI.
You’re left going from regulator to regulator, picking your way through different sets of rules.
For start-ups and scale-ups without big legal teams, that’s nigh-on impossible to navigate.
And for bigger banks and firms, it’s days of productivity sunk.
Now, RIO is teaming up to the Digital Regulation Cooperation Forum (DRCF).
To bring all of that guidance together into a one-stop shop.
A digital library that lets you quickly search for answers.
These are changes that firms of all shapes and sizes can take advantage of.
Up-and-coming fintechs to household-name banks will go from idea to impact faster:
Using AI to spot credit card fraud hours before humans can alone.
To get instant answers to your customers.
To analyse stocks, so people can get more out of their investments.
We’re clearing the path for you to harness AI to stay ahead of the game.
And to make people’s lives fundamentally better.
Because I know this is a sector that will keep reinventing itself.
Just as I know that AI will continue to bring profound, positive change to the UK.
With the right backing on adoption…
Access to skills…
And clarity on regulation…
We’ll make sure that this isn’t just a change that fintechs and banks are part of.
But a change that you lead.