The King’s Speech: What does it mean for the future of fintech?

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This content is contributed or sourced from third parties but has been subject to Finextra editorial review.

During his first speech as part of the State Opening of Parliament as monarch, King Charles defined and summarised the UK Government’s, and notably, Prime Minister Rishi Sunak’s priorities, for 2024 ahead of the next general election. Ministers intend to pass 21 laws across social changes, energy and environment, housing, policing, crime and justice, and technology and media – a third of which have been carried over from the previous session.

What did King Charles say?

King Charles started by highlighting the economic pressures on the nation and promised that his “Government will continue to take action to bring down inflation, to ease the cost of living for families and help businesses fund new jobs and investment.” He added that ministers will also “support the Bank of England to return inflation to target by taking responsible decisions on spending and borrowing. These decisions will help household finances, reduce public sector debt, and safeguard the financial security of the country.”

The speech also drew attention to the environmental goals previously set out, with mentions of legislation that will “reduce reliance on volatile international energy markets and hostile foreign regimes” and help the “country to transition to net zero by 2050 without adding undue burdens on households.” There was also a note on prioritising and building upon the UK’s “track-record of decarbonising faster than other G7 economies.

Turning to technology, King Charles explored how the commercial development of “emerging industries” such as self-driving cars and machine learning would be supported, as well as introducing new competition rules for digital markets. Later, he reiterated that the UK would continue to lead international discussions “to ensure that Artificial Intelligence is developed safely.”

What laws are the UK Government working towards?

Of the 21 laws set out in the Speech, here are those that are most relevant to the fintech industry:

1. Investigatory Powers (Amendment) Bill

- Law enforcement agencies will get greater access to certain personal data

- Technology companies must clear security features with the Home Office

2. Automated Vehicles Bill

- A legal framework for self-driving vehicles will be established.

3. Digital Markets, Competition and Consumers Bill

- Online consumer rights will be strengthened

- Fake reviews will be tackled.

4. Data Protection and Digital Information Bill

- Replace the EU’s data protection regime.

What will the impact be on the fintech industry?

Charlotte Crosswell, chair of the Centre for Finance, Innovation and Technology (CFIT), mentioned the Data Protection and Digital Information (DPDI) bill and explored how the Government has opened “the door to game-changing new technologies.” Focusing on the concept of ‘open data,’ Crosswell explained that for the fintech industry and the UK Government, the end goal is to reach a point where “all types of personal data – financial, biographical, demographic, employment, etc. – can be securely shared within a trustworthy ecosystem.”

She believes that this enhanced data sharing will be “transformational” and open data within the realm of open finance will afford the sector an abundance of opportunities. “Firstly, because financial data makes up so much of the data landscape; secondly, because the Government is using the success of Open Banking as the first step towards unlocking a wider Smart Data economy: and thirdly, because we are seeing real progress being made within Open Finance through our industry-wide coalition on how to apply Open-Banking-style data-sharing to financial services more broadly.

“Much like Open Banking showed the way, this bill will enable the Open Finance revolution which is the next step towards opening up all other datasets, so that the UK can become a globally competitive, Smart Data economy.” However, it is yet to be seen what this legislation will provide that GDPR does not already.

In Rhiannon Webster, partner and head of UK data privacy and cyber security at Ashurst’s view, the bill being mentioned in the Speech proves that “data protection reform remains a legislative priority for the current government. As the bill is already mid-way through parliamentary approval process, organisations should prepare for the law to be on the statute book before the next general election and can expect to see changes aimed at cutting red-tape and compliance burdens. 

"The King made reference to the bill in the context of encouraging innovation in technologies such as machine learning. We know the current draft of the bill includes reforms for simplifying existing provisions on solely automated decision making and demonstrates the government's intention to increase the number of decisions made using machine learning technology. This legislative approach aligns with one of the key messages emerging from the recent AI Safety Summit, where Rishi Sunak focussed on seizing the opportunities presented by AI technologies.”

What did King Charles fail to mention?

Five years since it was promised, there was no mention of a ban on so-called conversion therapy, which aims to change someone’s sexual orientation or gender identity. Alongside this, there was no new bill to ban the import of hunting trophies, and no follow up to the draft bill proposed in last year’s Queen’s Speech which would work to overhaul the treatment of people with learning disabilities and autism.

From a fintech perspective, Dan Morgan, senior government affairs director, Europe & APAC, SecurityScorecard, called for fortified cybersecurity frameworks and action to bolster cyber resilience, mentioning that the Speech was “a positive and progressive agenda but lacks a legislative plan for cybersecurity.” Morgan continued to say: “Contrasting with the European Union’s proactive stance in cybersecurity legislation with the introduction of NIS2 and CRA directives, the UK currently lacks a cohesive legislative counterpart despite commendable efforts from the National Cyber Security Authority (NCSA).”

He also referenced the Science, Innovation and Technology Committee’s recent inquiry into the cyber-resilience of the UK’s CNI (Critical National Infrastructure), but more needs to be done as “the absence of standardised cyber risk measurements has perpetuated a security trust deficit, with regulations and standards varying significantly across different sectors and nations. This inconsistency has led to a patchwork of security measures, leaving critical infrastructures exposed to cyber threats.”

Becky O'Connor, director of public affairs at PensionBee also drew attention to the “omission of the Pension Reform Bill” and how this “implies that Chancellor Hunt’s Mansion House proposals might set the direction of travel but lack a substantial commitment to how these changes will be made in reality. Following the upcoming general election, the incoming government will encounter a myriad of crucial decisions, where neglecting attention to pensions poses the danger of leaving pivotal reform issues unaddressed, perpetuating a stage of limbo in pension policies.”

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Contributed

This content is contributed or sourced from third parties but has been subject to Finextra editorial review.