There is a need for a comprehensive strategy to holistically address existential challenges stemming from the pandemic, climate change, poverty, and gender bias, said Ajay Banga, president of the World Bank.
In a compelling fireside chat at the Singapore Fintech Festival (SFF), he emphasised the imperative role of the private sector which can bring its financial resources, talent, and ingenuity to address these challenges. Merely relying solely on the public sector and governments is insufficient to solve the existential issues are insufficient, he said.
Banga was sharing his insights with Ravi Menon, managing director of the Monetary Authority of Singapore, where he shed light on the World Bank’s perspectives on tackling sustainability, inclusion and climate change challenges.
Addressing the issue of gender bias, Banga asserted that empowering women is crucial for global productivity and economic growth, stressing the importance of creating equal opportunities for women in the workforce.
Yang Peng, president of Ant International had also put forward similar arguments. At a panel discussion on financial services for the next billion consumers, he proposed that policymakers focus on transforming the financial system and fostering the development of new technologies to promote inclusive development.
Elaborating, Peng pointed the potential of open banking projects, highlighting the success of the Brazilian initiative called Pix. Launched in 2020, Pix runs 160 million instant payment transactions a day, at almost zero cost to banks. As a convenient cashless payment system, Pix also supports financial inclusion. According to the International Monetary Fund, Pix facilitated transactions of 71.5 million individuals as at December 2022, who had not made any electronic credit transfers over a one-year period prior to its launch.
“I believe such inclusive infrastructure like open banking and national QR schemes will connect the dots in a new financial landscape,” he said. It opens golden opportunities for the financial services industry to provide services to small- and medium-sized enterprises (SMEs) and underprivileged communities who want to participate for the first time in digital payments and digital commerce.
the development of new technologies to promote inclusive development.
Peng also expressed optimism about the transformative impact of new technologies, including artificial intelligence (AI), privacy computing, and large language models (LLMs), in driving financial inclusion.
He predicted that these advancements would replace traditional technologies, such as electronic wallets and payment systems which in turn could accelerate cross-border collaboration for digital payment systems.
“With privacy computing, all parties can pool data and information to create greater broader-based growth without sacrificing privacy and protection,” Peng added.
Fintech Festival driving inclusivity and innovation
Discussions on inclusivity, sustainability and innovation in the financial sector were at the heart of the Fintech Festival. In its eighth year, it attracted 62,000 attendees. More than 800 speakers, including global financial leaders, policymakers, investors, technologists, and entrepreneurs, shared their insights during the three-day event that concluded on Nov 17.
Several financial services were launched during the Festival, covering accessible finance, financial wellness, robo-advice, and transforming digital payments.
Artificial intelligence was a key theme of the festival since it had already begun integrating AI into products and services. However, concerns were raised about the responsible use of AI to safely build the global financial digital highways of the future.
Building inclusivity and sustainability
Adding to the discussion of harnessing technology as an enabler, Ari Sarkar, Asia-Pacific president of Mastercard, cited biometric authentication as a potential regulatory change for electronic KYC and video KYC and which could also lead to greater inclusivity.
“You can actually now onboard hundreds of millions of consumers at the bottom of the pyramid or underprivileged or underbanked people onto financial systems at a fraction of the cost and also at the fraction of the time that it took you a decade ago,” he said at the panel discussing financial inclusion for the next billion consumers.
These proposals would have to be part of the digital public infrastructure before they can be used to address inclusivity and sustainability issues.
Eric Jing, chairman and chief executive officer of the Ant Group, stressed that digital public infrastructure can lower banking costs, increase competition, and foster innovation to level the playing field for access to financial services.
Ant International’s strategy to participate in the digital public infrastructure is to focus on travel, trade, tech and talent as key drivers for international expansion, said Jing at a fireside chat with Sopnendu Mohanty, chief fintech officer, Monetary Authority of Singapore.
Working with partners, Ant will enable consumers to use e-wallets while travelling to pay for services just like how they would use the e-wallets while they were at home. They would then be able to enjoy the ease and convenience of using just one payment system. This benefit can also be enjoyed by small businesses when they undertake international trade.
To reduce costs of settlements and payments associated with cross-border trade, technologies like blockchain and tokenisation will be harnessed to enable SMEs do such transactions easily.
In technology, it will share with its partners AI-driven risk techniques, credit and payment technology to encourage the development of an open collaborative ecosystem. It is also joining hands with partners to develop global talent for the digital economy.
Singapore President Tharman Shanmugaratnam and Deputy Prime Minister Heng Swee Kiat, also visited SFF. President Tharman was a speaker at a fireside chat with Ravi Menon of MAS, sharing his thoughts on AI advances and the impact on job creation. Later he visited several booths at the SFF expo. Separately, Deputy Prime Minister Heng Swee Kiat also visited the SFF. Among the booths they visited were Ant, UOB and Prudential.
At the Ant booth, Jing and Yang explained the company’s key business pillars in digital payment and digital commerce. They also presented Ant’s key business pillars, including Alipay+, a cross-border mobile payment platform; Antom, a merchant payment system for digital engagement; Worldfirst, a platform for SMEs to grow cross-border trade; and Anext Bank, focusing on regional SMEs’ growth and global expansion.
