By FINTECH Books Contributor, Nick Wakefield
Advances in FinTech can transform banking, and in turn populations—how do they interact within their communities and exchange goods and services?
RegTech is essential to ensuring the safety of these transactions, yet at the same time enhances the efficacy of finance and commerce in reaching underserved segments of the population.
How are emerging financial systems adopting and adapting to change and how various regulatory bodies are not only encouraging but enabling both institutions and individuals to participate in this ‘new economy’? The discussion weaves together the effect FinTech and RegTech will have on emerging and emerged finance and trade ecosystems, with a focus on Asia-Pacific.
For example, Indonesia recently opened up its ID-card database to hundreds of financial institutions for KYC purposes and information sharing. Meanwhile in the Philippines, a large population already uses mobile, Facebook and micro-transactions more than it uses conventional banks.
Financial inclusion is a key pull factor, with regulatory bodies aiming to ensure their frameworks help facilitate it. In India, demonetisation was first positioned as a means of combatting tax evasion and fraud, yet it has created an opportunity for the unbanked to become banked via mobile payment providers. This could have a huge social impact in a country with population so well versed in technology and entrepreneurship.
In more developed financial ecosystems, regulation can drive the adoption of concepts such as data-lakes, wherein data gathered by various parts of a business on user habits is pooled to enable an institution to better understand its customers. Information gathered for regulatory requirements is becoming a commercial advantage.
Commonalities among populations in Asia Pacific that enable regulators to share best practice, by looking at how some jurisdictions are forging ahead and what others can learn from trends elsewhere.