The Review Interviews: Barry E James

Barry E. James, Chair of the British Blockchain & Frontier Tech Association was a keynote speaker at the 2020 Warwick FinTech Conference, speaking about “FinTech & the Future of Money, Banks & Civilisation”. Through his talk and an interview with The Review’s Editors, we were able to gain a fascinating insight into his career in FinTech and his views on the future of technologies such as cryptocurrencies and crowdfunding.

Starting his career working in what he terms “Jurassic FinTech” (early financial technologies that existed decades prior to the formal coining of the term “FinTech”), Barry worked as a software designer for companies including HSBC and BT before moving into the 1990s as an innovator. His role as an entrepreneur led to collaboration with other innovators via a MedTech startup that was world-leading in its provision of electronic connectivity solutions to UK healthcare professionals.

Barry then moved to championing crowdfunding, seeing that small businesses were being under-served by traditional retail banks, a problem which was exacerbated following the 2008 Financial Crisis. In our interview, Barry recalled the initial response of UK regulator, the FSA (then in the form of the FCA) to efforts to innovate in the crowdfunding space. Faced with an innovative financial technology, the FCA sought to shut down these innovative efforts rather than working with private sector companies to better understand the technology and the risks and opportunities it posed.

Work with regulators came to be one of the central themes of the interview, with Barry arguing that regulators should play a positive and dynamic role in nurturing FinTech innovation. In 2012 he was the first to argue that regulators should contain innovation units to ensure that regulatory policy fosters rather than stifles innovation. Whilst discussing this, Barry cited his work co-creating the UK All Parliamentary Group on Crowdfunding and Non-Bank Finance, arguing that via this forum he found a profound lack of understanding of FinTech, with this ignorance and lack of education leading to a dearth of debate in the regulatory and policy-making space. The “right” were keen to regulate less and the “left” were keen to regulate more, but both sides were making these arguments on the basis of ideology rather than an understanding of how regulation could support a nascent sector in which the UK has world-leading expertise.

In his keynote speech, Barry argued that money will become increasingly global, with “toll roads” currently existing in the global financial system that will remain unless they are deliberately eliminated. This can be achieved through the co-creation of global public infrastructure. With the world currently lying in the “trough” of the innovation hype-cycle, this has seen excitement regarding FinTech and digital currencies run ahead of the ability of companies to deliver followed by the present “trough” in which people lose interest and fail to realise that a paradigm shift is actually taking place.

Talking more about digital currencies, Barry highlighted issues regarding the potential of central banks to issue digital currencies. He voiced concerns about the accountability of such institutions, which can lack democratic oversight. If FinTech companies and central banks play an ever greater role in defining the future of money, then do the people have sufficient democratic oversight to ensure that these powerful institutions are making decisions that ensure the economy works for everyone?

Barry ended by bringing to the forefront some of the social themes of his work, asking what an economy is for, and whether the present global economy was working for the majority of the world’s population. He argued that humanity now needs institutions fit for the next age of human progress, that can challenge existing institutions and ensure that as we move forwards with FinTech innovation we ensure that we are doing so in a way that makes the economy work better for the people it is designed for.