Finance, Technology and Regulation in 2021 - YouTube

In January 2020, we began with the first video in this series of Looking Back Looking Forward.

And we began in January 2020 with this big- picture idea of the 2020's: A new decade.

We looked back, we saw that the 2010's had been dominated by three themes.

They had been dominated by the 2008 Global Financial Crisis.

They had been dominated by challenges to finance and regulations around the world responding to that crisis.

And finance had been dominated by technology, the applications of new technologies to financial services, changing the way that we did finance.

The origins of things like FinTech, financial technology and RegTech, regulatory technology.

And last year in January, we looked forward and said that for the 2020's, our dominant themes are going to be first: Technology.

But technology very different than that which we had seen in the 2010's.

Technologies like Libra, which fundamentally changed the way that systems operate.

And we said that in addition to technology, the second key theme for the 2020's is going to be about Sustainability.

And you know, when we think about sustainability, 2020 reinforced this more than any of us could have possibly imagined.

Why? Because COVID-19 as a pandemic; as a health crisis, is a sustainability crisis.

An existential sustainability crisis that threatens not only finance but the entire way that our economies, societies and civilisations around the world operate.

And this is exactly the sort of sustainability challenge that we expect to see across the 2020's, particularly with climate change.

And of course, our last theme for the 2020's was a tension between Globalisation and Fragmentation, particularly as a result of major power politics and tensions,

between the US and China and others, putting a brake on globalisation. And of course 2020 with trade barriers, with the breakdown in global supply chains,

with political issues around the world, has fundamentally shown this. And so, if we look back, I think we can say that these three key themes for the 2020's

very much still hold despite the events of the past twelve months. So let's look at 2021.

What do we see being the key themes in 2021?

And the first is something leading on from our last episodes of Series 1. And that is an ongoing focus on Digital Finance Platforms.

We've seen the actions by the Chinese government with Ant Financial. We've also seen more recently actions from the US government with Google.

And we've seen the new EU digital financial strategy from 2020. All of these focus on containing the concentration in platforms that have emerged

across the past ten years, but certainly 2020 with its COVID-19 digitisation-driven transformation has accelerated this process of dominance.

What is our second big theme? Well, in any sort of finance, technology news today, in January 2021, one news story pops up over and over: Bitcoin.

Bitcoin everyday seems to be hitting new highs. Almost double the last set of highs that we saw just two years ago.

And so, what do we think is going to be the big trend for cryptocurrencies? For digital assets in 2021? Normalisation.

What do I mean by normalisation? I mean that increasingly we're seeing regulations, first in the EU, with the markets in crypto asset regulation,

and we're expecting the similar sorts of things in the US which will bring rules, which will allow the traditional financial sector to deal in cryptocurrencies.

What's our third big trip? Our third big area? It's really around 'Building Back Better'. Building systems as we come out of Covid.

Better payment systems; things like central bank digital currencies; digital regulatory reporting and AML.

What's our fourth biggest theme? Sustainability. And I think what Covid has done is it has very much driven a consensus around the necessity of finance addressing climate change.

The EU was already there. China was there. But with the new US administration, the US will be there today as well.

And I think this cooperation in climate change could be one of our big finance trends of 2021.

And what is our last? It's about tensions. Tensions between globalisation and fragmentation in the area of data.

Data is core to finance. Finance is a digitised industry; is data. And data and finance are core to the future success and competitiveness of major economies around the world.

And so, we are seeing tensions not just between the state and the private sector, like Ant, or Google or Facebook, but also between states over data-flows.

I think when we think about 2021, those are going to be our big trends: Platforms, Crypto, Normalisation, RegTech around building better infrastructure, sustainability, and finally, data tensions.

And that, is what I think we're going to be talking about across 2021 in Series 2 of Looking Back Looking Forward.