UK Finance’s latest must–read blogs?

Key Conversation event: New Digital Assets and Money

The recent event on the evolution of digital assets in the UK convened leading voices from government, industry, and the arts to discuss how digital assets, tokenisation, and blockchain technologies are reshaping finance and the broader economy.

Hosted by UK Finance and sponsored by Quant and Addleshaw Goddard, the day included deep dives into key areas like digital money for payments, opportunities for tokenisation in capital markets, and the unique aspects of alternative assets like cryptocurrencies and non-fungible tokens (NFTs).

Opening remarks on Digital Frameworks and economic growth

Kicking off the event, Professor Sarah Green, former Law Commissioner for England and Wales, emphasised the need for robust frameworks: “For digital assets to thrive, we need frameworks that not only secure these assets but also inspire confidence among users and investors.” This set the stage for a central theme of the day – the importance of structured, secure, and transparent systems in building trust and promoting innovation in digital finance.

The macro perspective: Bridging skills and seizing opportunities

The first panel brought together policymakers and industry leaders to discuss the real-world impacts of digital assets on productivity and employment in the UK. Katey Neate, COO Digital Assets at BNYM, and Lord Holmes highlighted the digital skills gap as a key area needing attention: “Digital assets hold vast potential for enhancing productivity across the UK, but to fully realise this, we must bridge the digital skills gap and cultivate talent across sectors.” As the UK works to establish itself as a global fintech hub, this focus on skills and accessibility underscores the need to prepare the workforce for a digital economy.

Digital money for payments: Exploring new use cases

The discussion then turned to digital money, covering the possibilities for central bank digital currencies (CBDCs), stablecoins, and tokenised deposits. Speakers noted the importance of finalising the regulatory framework to support digital money’s adoption, driven by the emergence of clear, new benefits for the economy. This session highlighted how these new forms of money could drive financial inclusion, simplify cross-border payments, and provide businesses and consumers with more options for secure transactions.

Read the full blog by UK Finance’s Manager, Payments, Innovation and Resilience Marius B. and Principal, Payments, Rhiannon Butterfield .

GenAI Solutions for Banking: Ethical and other important considerations

The emergence of the FinTech world has encouraged traditional banks to increasingly turn to technological innovations in order to maintain their competitive edge.

Digitisation through API integration, AI and Machine Learning have created new avenues for the modernisation of banking platforms. Historically, AI was predominantly used by a selective group of organisations like FinTechs and Digital Banks.?

However, the emergence of GenAI presents an opportunity for banks and financial institutions to leverage this cutting-edge technology. GenAI is simpler, easier and it requires less resources than traditional AI. With AI, you need modelers, data scientists, and a large amount of data. This is not something every institution can afford or have the resources and time to embrace it. GenAI is an opportunity for these institutions to jump into the wagon and tap into its benefits.

As GenAI has unlocked significant potential in the financial sector, fueled by increased curiosity and creativity, it also yielded critical lessons. A key learning point has been that there are?numerous ethical implications.

• The first that comes to mind is bias and discrimination. GenAI models can lead to unfair outcomes if they are trained on biased data. Addressing biases in AI models is essential to ensure fairness and prevent discrimination, while fostering transparency, accountability and traceability.?
• Privacy is also critical. Misusing AI-generated content, and over-reliance on AI could potentially affect privacy breaches (think deepfake), it could also expose sensitive data in unexpected ways. Strong guardrails are required to maintain the privacy and accuracy of GenAI generated content.??
• Additionally, long term environmental and social impacts of AI must be considered, with attention to the creation of fake content and intellectual property rights.?

Read the full blog by Omar Akkor , Senior Director, Banking Innovation and Partnerships, 穆迪分析 .

Preparing for NIS2: What UK Financial Institutions need to know

With a focus on cybersecurity and resilience, NIS2 –or Directive (EU) 2022/2555– aims to enhance the overall cybersecurity posture within the EU.

It introduces security requirements, reporting obligations, and sanctions, as a response to the increased frequency and impact of cyberattacks on EU companies and critical infrastructure.

Although NIS2 requirements do not apply to the UK, compliance is crucial for financial institutions operating within EU supply chains. This includes heightened scrutiny on third-party risk management, supply chain resilience, and cybersecurity practices. For CISOs in the UK, understanding and aligning with NIS2 is key to securing both trust and business continuity across EU markets.

Navigating the Supply Chain Risk Management Imperative

As the digital landscape grows more interconnected, every new supplier—especially those leveraging AI, cloud services, and automation—presents a potential gateway for cyber threats. By investing in supply chain cybersecurity, organisations are not just preventing potential breaches; they're also avoiding the significant financial and reputational repercussions that can follow.

NIS2 provides three mechanisms to guarantee supply chain security:

Supplier Risk Assessment - The evaluation of security-related aspects concerning the relationships between each entity and its direct suppliers or service providers.??

Coordinated Security Risk Assessment - A procedure, carried out at the EU level, to assess the level of risk of a specific supply chain.

National Risk Assessment - Powers of Member States to extend the scope of the Directive to entities originally outside its scope.

Read the full blog by Tim Grieveson , Senior Vice President, Global Cyber Risk Advisor, Bitsight .