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A revolution is sweeping today’s financial landscape. The emergence of FinTech and growing use of mobile money, blockchain technology, big data, artificial intelligence, electronic platforms, advanced analytics and automated processes, among others, are challenging established business models. New players are entering markets long dominated by traditional financial service providers, even as the latter are now embracing new technologies to help them face the threat of disintermediation by new competitors across business lines.
Innovations such as mobile and agent banking and peer-to-peer lending have already demonstrated the power of technology to help unbanked individuals and small businesses gain access to finance. New applications are enhancing business processes such as clearing and settlement, compliance, risk management and fund administration. Technologies such as blockchains have potential applications that could both revolutionize financial service firms’ efficiency and responsiveness to customer needs and also enable regulators to monitor the financial system more effectively and in real time.
Policy makers and regulators will inevitably respond to these developments, in compliance with mandates to promote financial stability, protect consumers and privacy and maintain the integrity of financial systems. The advent of RegTech promises to spur a parallel revolution in this space. However, for the APEC Leaders’ and Finance Ministers’ aspirations to make financial systems more inclusive, efficient and responsive to the region’s vast financing needs to be met, a balanced and coherent approach that maximizes the benefits of innovation while adequately addressing emerging risks and concerns will be required.
This APFF Roundtable seeks to enable stakeholders from private and public sectors to obtain a better understanding of the forces driving changes in the financial industry and the ensuing policy and regulatory challenges that need to be addressed. ABAC hopes that this dialogue will pave the way to a commonly shared view of the future and closer collaboration between government and the private sector in harnessing innovation to build bigger, robust and inclusive financial markets in the Asia-Pacific region.
PROGRAM
Session 1: Financial innovation and its potential for promoting financial inclusion and market efficiency
Various factors have conspired to render many traditional financial institutions unable to serve the financing needs of large numbers of businesses and individuals across the region. Technological developments began to spur innovations that were harnessed to serve these needs, first in mobile and agent banking. As the development and convergence of new technologies accelerated in recent years, a new wave of innovation has started to sweep the financial industry, challenging traditional business models. This session seeks to provide guidance for future public-private policy collaboration by generating a snapshot of this rapidly evolving landscape, its implications for the financial sector’s role in the broader real economy, and the directions in which this process is heading.
Session 2: Building a robust enabling ecosystem for inclusive financial innovation
As innovation gives rise to a new ecosystem of financial institutions, services and market infrastructure, policies and regulations will also need to evolve. In addition to ensuring that critical regulatory goals such as financial stability, cyber security, data privacy, consumer protection and the fight against crime and terrorism will continue to be met, they will also need to promote a coherent policy and regulatory environment that allows the financial sector to support broader goals, including financial inclusion, continued innovation and the growth of trade and investment across the region.
At the same time, technologies are emerging that regulators can leverage to more efficiently acquire data, use real-time information and incorporate algorithms and analytics in carrying out their mission. This session will discuss the incorporation of regulatory requirements into technology protocols that is promoting the automation of the regulatory process, the evolution of regulatory models and how industry, policy makers and all relevant regulators can collaborate to build a robust and coherent ecosystem for inclusive financial innovation.