Next week sees the first in the new season of the Ahead of the Curves discussion groups, convened by Jericho Chambers on behalf of Stifel Europe. Having explored the Future of the Professions in 2019 and the ethics and social (in)justices of Big Tech. in the past twelve months, we are now set to consider the “double wicked challenge” of Brexit and the post-COVID recovery.
None of us should be under any illusions on the scale of the challenges. The question of “who pays & how?” – rooted in tax policy – is already mainstream while, as LSE Professor John van Reenen noted in a recent blog, “the costs of Brexit are likely to be double that of COVID-19.” With money too tight to mention, a current edition of the Social Europe platform headlined Brexit as “a tragedy’s final act”. Whether you’re an ardent Brexiteer or a battle-weary Remoaner, when it comes to money, tough times lie ahead.
Meanwhile, the decentralisation of money via crypto-currencies offers near-plausible alternatives to the current banking system and bypasses much of existing national infrastructure. Bitcoin is often accused of transience – even faddishness – but markets suggest otherwise: it is currently running at about £13,720, or 88% of its all-time high, and is 140% up in the year.
I have spent much time in recent weeks thinking about the future of money in the current context – and where we head next. This was inspired in part by a recent roundtable on FinTech and a provocation to the group from 10x Technologies Chair – and former Barclays CEO – Antony Jenkins. Plus, as the UK enters its new, mid-Brexit world as an allegedly more muscular, sovereign nation, some are already calling for greater currency independence, matched with a mid-21st century re-interpretation of Harold Wilson’s famous white heat of technological revolution.
Unlimited possibilities and benefits no doubt flow from a tech-enabled financial future but I worry about a completely cashless society and, as an extension, the social inequalities that might be exacerbated as an unintended consequence. Since the boundless optimism on which Tim Berners-Lee created the worldwide web, technology has not produced as much inclusion as its pioneers might have liked, nor indeed promised. If cash disappears, what happens to those at the edge of society who remain dependent on it? Are they, similarly, ushered from view?
The clamour surrounding AI and robotics is intensifying and, accelerated by the pandemic experience, advances continue at pace. Yet it has always struck me that, while we can envision a future of autonomous vehicles and remote robotic surgery, we have yet to master flawless automated checkouts at our local Tesco. “Unexpected item in the bagging area” is a familiar, if somewhat annoying, refrain.
This may sound like a trivial point but runs to the heart of the issue of how and when we are truly fit and ready to change. It also speaks volumes on who and how we trust. At what point, for instance, does FinTech (admittedly, something of a catch-all phrase) pass the competence test, when we can step safely into a non-dystopian financial future? Moreover, if cash is, as the cliché runs, the oldest/ first currency of trust – a statement of confidence – are we ready and willing to let go right now, in servitude to digital alternatives? Is there sufficient engagement with the technology to foster the level of understanding and trust required for mainstream adoption?
A cashless society has many advantages – not least, as we’ve seen in the last nine months, for health & hygiene. As we move on-line at pace, so the need for cash diminishes anyway. Removing cash from the system also deprives the Black Economy and, as a former UK Shadow Chancellor noted (to some understandable scorn), can only increase the wider tax take as window cleaners, plumbers and others suddenly have fewer hiding places and are forced to invoice for everything, everywhere.
There is, within this, a strong case for new transparency – which we broadly regard as A Good Thing. The corollary – alongside Antony Jenkins’ call for workers to be paid daily, rather than monthly (easily achievable, when FinTech-enabled) – is that we might even move to taxation in real-time, not least on VAT; possibly on Corporate Income Tax, too. After all, if it’s possible to track the whereabouts of our Amazon deliveries, it surely stands to reason that we can apply similar thinking and technology to the national tax take? Perhaps something to broaden Rishi Sunak’s famous smile.
This all might sound a little Orwellian. Fears of global cybercriminal attacks aside (note Prime Minster Johnson’s commitment on this in the recent announcement on Defence spending), a FinTech powered future will inevitably grant significant access to personal data to a number of private sector players – and do we really trust them to do not only what is legal, but what is right? Expressed simply, could a new era of FinTech – ushered in by a combination of post-COVID and mid-Brexit naive hopefulness – initiate the largest private sector data scrape we have seen to date? The purpose and integrity of these technology businesses must be open to fully scrutiny.
The asking of such questions is not a luxury: it the bedrock of engagement and acceptance by citizens and society. I’m reminded of a recent article by Dr Alberto Giubilini, Research Fellow at Oxford University’s Uehiro Centre for Practical Ethics. Although he was discussing the (absent) ethics of lockdown, the same principles apply to the ethics of cash and the future of money: “Is it ethical to lock us down again? This is not a facetious question. Over the past eight months, we have heard a great deal about the policies used to manage the virus, but very little about the ethics. This is a mistake. We should be asking how we can critically and reasonably strike a balance between conflicting values and interests. Yet even now, with so much at stake, this basic question on the ethics of our policies is not being properly asked.”
There is perhaps no such thing as the absolute right answer to a complex problem. But you can never ask the wrong question – and bigger, ethical questions should be asked of us all, by us all. We need room for reasoned debate.
The biggest question of all, however, speaks to the challenges of social inclusion. Is a potential move to a cashless society an act of (deliberate or accidental) mass dis-enfranchisement? From access to health facilities to working from home effectiveness, the pandemic and accompanying lockdown have been hugely exclusionary and discriminatory against those without broadband and/ or within easy reach of a PC, tablet or mobile device.
The underlying assumption for our brave new FinTech world is that we all enjoy the same tech-enabled privileges. This is false and dangerous. With one-third of UK households still without mobile broadband access and many still unable to open a bank account, this is, at worst, a wilfully blind assumption of some arrogance – and, at best, mis-placed enthusiasm for the new world ahead.
One immediate solution of course, is to considerably up-weight infrastructure investment and provide all citizens with fair and equal broadband access as a fundamental human right. Alongside this, or alternatively, think about a National Finance Card, on which all data is held. If not usable on-line, then it might at least be visible and redeemable at every High Street Post Office, re-framed as a truly citizen-centric service and de facto “People’s Bank”. The idea of national e- or crypto-currencies to deliver this is not new. Sweden’s Riksbank is already making a play in this space. Correctly used, technology offers the opportunity to do significant good.
There are multiple opportunities here for some splendid, joined-up thinking: the same card could hold our health records, driving license data, Universal Basic Income benefits and, yes, our personal/ national identity. This last point is historically the most controversial – especially for libertarians – but somehow makes more sense in this new age of tech-driven transparency. What, after all, do any of us have to hide? And can we any longer hide it anyway? Libertarian or otherwise, when thinking of a National Finance Card, we should still beware echoes of China and social credits; excessive state intervention and social determinism.
The ultimate question, of course, is who holds this data and how? Who has the competence to design and deliver? Recent forays into Track & Trace – and even the basic compilation of personal health data – do not bode well. As author Margaret Heffernan noted at an earlier Stifel discussion group “competence is a hugely under-rated value when it comes to trust”. There is a certain irony in taking back control, only to then hand it over to unregulated and unproven others.
To date, over 600 business leaders, commentators, academics and experts have been involved in the Ahead of the Curves initiative – we continue to listen, learn and act on their insights and wisdom and hugely appreciate their participation in the programme.
Eithne O’Leary is President and CEO of Stifel Europe