10  https://www.mckinsey.com/industries/financial-services/our-insights/talent-in-wholesale-banking-building-a-sustainable-competitiveadvantage 11 https://www.ft.com/content/c8c79254-bb33-11e8-8274-55b72926558f 12 https://www.ft.com/content/1c3e8d8a-6a70-11e8-aee1-39f3459514fd 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  Figure 4: Average female representation across UK financial services13  More, broader, market participants means a wider range of potential employment opportunities for those keen to join the market. Workforce diversity differs across sectors (Figure 4) and across firms within sectors. But it also means that service providers need to get better at relationship management, investing more in understanding increasingly diverse customer needs. It is striking, for example, that portfolio managers in Asia are twice as likely to be female (Figure 5); and the gender mix of retail FX trading in Europe – a rapidly growing market segment – is approaching 50/50 (Figure 6). It would be too simplistic to say that service providers need to be as diverse as their customer base. 14 But recruiting from a broader diversity pool and hiring people with different life experiences helps firms understand the mindset of their clients better, improving customer engagement and ultimately increasing returns. 13  https://newfinancial.org/wp-content/uploads/2016/06/Women_in_UK_finserv_2016_FINAL.pdf See for instance, p.11 of the 2016 CFA report on gender diversity in investment management at: https://www.cfainstitute.org/en/research/survey-reports/gender-diversity-report 14  7  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  7  Figure 5: Female representation in portfolio management by region15  Figure 6: Gender breakdown of retail FX traders16  My final point is on culture. Public authorities and firms right across the financial spectrum have put an enormous amount of effort into culture change in recent years.

Perhaps the cliques that existed in parts of the FX market in the past have proved more adept at self-perpetuation than might have been hoped, particularly where they extended across both sell- and buy-side. Or remuneration schemes may have continued to reward those who make particularly large profits – even if the same behaviour can also lead to particularly large losses – rather than those who deliver a higher average return with fewer fireworks. Whatever the reason, times are changing in the FX market – and fast. And that’s what makes me optimistic about the future, and the role all of you here today can play in it. The FX market of tomorrow, and why embracing diversity will no longer be an option  I want to focus on three key drivers of change: technology; broadening market participation; and culture. The most profound of these for the economics of the industry is technology. Technological advances have fundamentally changed the face of trading and revolutionised the structure of the FX market. These days, only a minority of FX trades involve people actually talking to one other. And a growing number don’t even need someone to click a mouse, as algorithmic and high frequency trading techniques take over from manual trading. That is particularly true for vanilla flow trading. To take just one example, an estimated 70% of orders on EBS – a key inter-dealing platform for spot FX – are submitted by algorithms9.