The Bank of England decided to share its balance sheet to tech firms and payment companies as it is facing fierce competition from European countries post-Brexit. This strategy aims to grab the interest of giants like Facebook to bolster Britain’s 7 billion pound Fintech sector.

The BOE has warned that the economy is going through its weakest phase since the global financial crisis spreading from companies to consumers. In the last quarterly review, the bank has reported a cut in its growth forecast for 2019 from 1.7% to 1.2%. The jitters of Brexit have resulted for the sharp downward revision, suggesting 25% chances of a recession by 2020.

If this gloomy forecast turns to be accurate, 2019 will be recording the slowest growth rate since the economy contracted by 4.2%, during the great financial crisis of 2009. The strategy-makers of the Bank agree that the fog of Brexit is creating a series of tensions due to short-term validity in the economic data. BoE confirms that it will provide an “appropriate” level of access to its 500 billion pound balance sheet for investors and new payment provider to refer. This will put them more on par with all big financial institutions that dominate digital payments in the market.

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The Bank of England has taken the boldest step ever, being the first major central bank across the globe to let non-banks have transparency to its coffers. This move has made BoE potentially attractive to large tech companies planning to expand, such as Apple and Amazon. Some experts also predict that BoE might consider taking out insurance strategies to compete with technologically advanced commercial banks increasing revenue.

Arguably all traditional banks are now facing stiff competition and the growing threat from innovations like Facebook’s Libra and other cryptocurrencies. The strategy of keeping all balance sheets transparent is one of the many defensive steps adopted by banks to keep up their stand in this innovative strategizing environment. Ease and security of payments is the primary growth driver in the Fintech industry, which has been simplified by digital payments platforms. The British Central Finance authorities have announced a review of the entire payment landscape to ensure that the core regulation and infrastructure keep pace with the dizzying array of new payment platforms. Prominent firms like registered and trusted banks, dealers-brokers, and the clearing-houses will have access to the central bank’s balance sheets and account details. This initiative will create liquidity as these institutions will then be willing to park their cash in the BoE.

The British Government had realized the potential of the Fintech sector a couple of years back as it employs about 60,000 people. But, initiatives to push it further have been prioritized this year to keep pace with other International competitors. The realization that transparency is required since electronic payments overtaking quarter of all cash transactions globally has now occurred. The fintech firms in London have already expressed their anxiety about locking out of the EU market post-Brexit. UK regulators are pushing all fintech firms to incorporate flexibility by ensuring the timely adoption of internationalized business models.

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