Philip Lowe, governor of the Reserve Bank of Australia, has called data “the new oil of the 21st century”, commenting that investment in data capacity will be key to Australia’s prosperity.

“There are opportunities for digital innovation in every sector of our economy. Almost every organization needs a strong digital capability to perform well, innovate and increase productivity,” Dr Lowe said in an address at the Business Analytics Conference in Melbourne.

“Technology and data analytics also hold the keys to solving many of the grand challenges of our time, including controlling pandemics, tackling climate change and responding to increasing cyber threats.”

Australia needs to invest in a digital workforce with skills in predictive analytics, machine learning and artificial intelligence, Dr Lowe noted.

The government has decided to target the digital economy, with the Prime Minister recently extending an invitation to migrant workers at the Singapore FinTech Festival.

But the RBA has also decided to make its own investments in digital infrastructure, with Dr Lowe commenting that the central bank has made data one of its internal strategic focus areas for the next few years.

The organization has created an enterprise data office that is responsible for data management and methodologies – including the use of machine learning and “big data”. The central bank is developing technology for a number of its initiatives, including credit data analytics and the New Payments Platform.

"During the pandemic, we've been able to access and analyze a wider range of data to get real-time readings about economic conditions in a way that wasn't possible in the past," Dr Lowe said.

The RBA is also conducting research into the technology and policy implications of launching the central bank's own wholesale digital currency, which could use distributed ledger technology to help settle transactions in the interbank system, Dr Lowe said.

The central bank has teamed up with CBA, NAB and Perpetual, as well as blockchain technology provider ConsenSys Software, to explore introducing the currency in November.

The parties involved said they expect to publish a report with key findings in the first half of 2021.

"Part of this work is being done in the RBA's in-house innovation lab, where we collaborate with external parties on proof of concept," commented Dr Low.

"We look forward to sharing more details in due course."

The RBA and the Payment Systems Council have also signaled their support for forms of digital identity that can be used in both the public and private sectors.

"An effective digital identity system is important to promote competition, security and innovation in the digital economy," said Dr Low.

"The Australian Government also supports digital identity services for convenient and secure access to government services online."

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting mainly on banking, financial services and wealth.

Prior to joining the team in 2018, Sarah worked in commercial media and produced stories for a current affairs program on public radio.

You can contact her at [email protected].