Real-time digital platforms are revolutionising the way value is transferred and circulated throughout the UK economy, whether it is through financial services, retail or the broader consumer economy, and may increasingly be driving change in the way businesses compete, and governments and regulators design and implement policy, for both good and bad.
Compliance demands in a live digital environment
Digital wagering has become one of the more closely watched segments of the platform economy, and a UK online casino now operates under some of the strictest licensing conditions in the world, making it a useful benchmark for how real-time digital platforms manage compliance, consumer risk, and revenue transparency. Increased pressure on retail banking and finance to provide timely and accurate data is starting to filter across other categories of platforms. Authorities such as the Financial Conduct Authority are increasingly expecting to receive detailed, real-time regulatory data rather than just periodic, batch-based updates. This trend is in line with the FCA’s digital reporting programme aimed at reducing the time it takes for organisations in the financial industry to meet compliance requirements.
There is increasing pressure on platform operators from multiple industry sectors to surface relevant risk signals in real time. This trend is influencing the design of technology platforms and architectures from the bottom up.
Policy frameworks shaping platform growth
A new report on the state of digital competition in the UK, from the experts who recommended interventions to promote competition in the sector, reveals how entrenched dominant positions in key digital markets hinder innovation and harm consumers. Achieving unlocking of these markets will require both decisive action and further clarity around the rights to data portability and interoperability.
The Digital Economy Act set out a framework of platform regulation but since then the legislation has not kept pace with the rapid evolution of live digital platforms. Government digital vision documents point to the need for on-going reform rather than a complete rethink of the role of regulation in the digital economy.
Money, payments, and platform economics
The payments infrastructure needed to support real-time revenue generation and settlement is a key area of study. The Bank of England’s work on new digital payment technologies and its early research into the potential for a central bank digital currency are also influencing the longer-term view of the monetary architecture needed to support such native payments infrastructure.
New figures from the UK digital strategy, tracking the growth of the digital economy, reveal that sectors mediated by technology platforms now account for a large and growing proportion of the country’s GDP. But the way this growth is taxed, regulated and measured will shape the rest of the UK’s digital economy.
A maturing landscape with unresolved tensions
Real-time platforms have in many cases moved from being novel features of the economy to being core infrastructure across the whole economy. Regulations and regulatory policies are playing catch-up, and there is a significant gap between what current platforms can do and the potential regulatory architecture. The strongest players may be those who build their compliance architectures into their product decisions, not simply as a constraint imposed by external bodies.
