We have just passed the first anniversary of the introduction of a “faster payments system” by British banks. The system is still only partly operational. Progress in introducing everyday financial transactions to the electronic age remains glacial.

When financial institutions talk about the chilling effect of regulation on innovation, the innovation they have in mind relates to complex new financial instruments, not more convenient forms of banking. The difference is that faster payments benefit customers of banks but not banks themselves. The experience of public policy towards payment systems is not encouraging for those who look forward to better regulation of financial services.