ACD business forum focuses on fintech

FINANCIAL technology, more commonly referred to as fintech, could be a “supercharger” to accelerate Asian economies, said Vorapol Socatiyanurak, chairman of the Finance, Banking, Financial Institutions and Capital Markets subcommittee of Thailand’s National Legislative Assembly.

Financial innovations would be beneficial for Asian Cooperative Dialogue (ACD) countries because they offer new ways to access finance for consumers in the region, where 1 billion people are still outside traditional banking systems but rates of mobile phone penetration are high, Vorapol said.

“Fintech will disrupt Asian economies in a good way since this evolution of technology will allow people to access finance efficiently,” he said. “‘Disruptive fintech’ offers opportunities for ‘unbank’ [consumers] while it could hurt the bottom line of banks.”

Vorapol suggested that the ACD to set up an fintech committee as a venue for member states to meet and share policies and practices to foster fintech to achieve the ultimate goal of financial connectivity and economic growth in the region.

Roy Teo, director of the FinTech & Innovation Group at the Monetary Authority of Singapore (MAS), said one key area of financial reform that Singapore is considering is to shift the contemporary huge financial architecture towards an application programming interface that would help to provide access to small firms or even individual developers.

He said the MAS would measure its success in nurturing fintech development by taking into account improvements to the efficiency of the financial system, risk management aspects, and how new technologies were creating opportunities and better lives for citizens.

“There will be a shift of jobs. Some jobs will be displaced and at the same time, some will be created,” he said. 

Sunil Chopra, senior adviser to the CEO and managing director of Tata Consultancy Services, said fintech revenues were expected to grow from US$9 billion (Bt313.9 billion) at present to $100 billion by 2020, most of which would come from payments and peer-to-peer lending services.

Potential benefits of fintech include efficiency and reduced costs for financial transactions and settlements, creating transparency, promoting a cashless society, fraud reduction and creating a new breed of entrepreneurs. 

Asia’s market will grow rapidly since the credit-card penetration rate is low, so fintech innovation will leapfrog over other conventional sources of funding. Retailers can also grow rapidly using financial technologies because only 5 per cent of transactions are currently carried out online, Chopra said.

Benedicte Nolens, senior director and head of Risk & Strategy at the Hong Kong’s Securities and Futures Commission (SFC), said to measure success in fintech development, the SFC would consider whether efforts helped to create better outcomes for customers.

Fintech also links to broader agendas of environmental and social governance as well as inclusiveness, Nolens said, adding that such innovation grows the fastest where there is a very strong centralised database of citizens’ identities.