We only need to think of robotics, artificial intelligence, blockchains, and smart phones with 5G Wi-Fi to realize the extent of the changes that lie ahead for financial services. New technologies also bring opportunities. The Austrian economist, Finance Minister, and banker Joseph Schumpeter demonstrated in the 1920s that successive waves of technological change raise productivity, income, and living standards. However, we know from long experience that technological change often results in costs involving new risks that must be addressed in order to optimise the net benefit. So while FinTech  will broaden consumers’ range of choices in financial intermediation, it also brings new risks, both to the security of transactions and to privacy. To maintain financial stability and real economic activity, we need payment and settlement systems that are secure. As a result, cybersecurity has moved from being a technical issue to a central bank issue. That is why the Nordic central banks have set up this forum for discussion and cooperation so as to foster closer cooperation on cyber resilience and cybersecurity. Today the focus is on financial market infrastructure. One of the questions being asked in this section of the conference is, “What challenges are likely to emerge with new operating models and new actors in the financial sector?” As I said before, the FinTech snowstorm is already here. The newest challenge with respect to cybersecurity is the emergence of new players offering financial services, some of whom have not provided financial services before. The question therefore becomes: What technology are they using?

Historically, companies’ assets have tended to be physical and tangible, such as plant and machinery. But businesses and their assets are changing fast. Increasingly, businesses’ assets are taking on an intangible form, such as intellectual property, patents and goodwill. 45  On some estimates, intangible assets are already  41  As the data show suspiciously large rates of job churn between the bottom and top deciles of the firm-level productivity distribution, we strip those deciles out from our analysis here, and only look at the 2 nd to 8th deciles. Our description of ‘quartiles’ here is therefore not strictly the quartiles of the complete distribution. 42 For example, North (1990) and Haldane (2017). 43 Coase (1960). 44 Acemoglu and Robinson (2012). 45 For example, Haskel and Westlake (2017). 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  larger than tangibles among UK and US companies. Protecting these intangibles from expropriation is every bit as important as for tangible assets. Fortunately, in international league tables the UK tends to fare favourably on those fronts, with a wellestablished rule of law and property rights, supporting investment and innovation. 46  There are other aspects  of UK’s institutional infrastructure which fare less well, however, in ways which might help to explain its productivity gaps. Let me focus on two: its diffusion infrastructure and financial infrastructure. A simple comparison of UK and German institutional infrastructures is revealing here. Germany has a long-established infrastructure to support innovation and its diffusion to German companies.