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ADB, IMF and BSP held seminar on new financial technology

New innovations like distributed ledger technologies, virtual currencies, machine learning, and big data, can improve financial inclusion.


ADB Last Updated at 03 May 2018, 19:05 IST Philippines
ADB, IMF and BSP held seminar on new financial technology
  • New technologies hold promise for bringing financial services to poorer communities and for overcoming the challenge. (Image Credit: ADB)

Asia and the Pacific have made important progress in expanding and deepening its financial systems, but must make further progress to improve financial inclusion using new financial technology (fintech), according to participants at a high-level Asian Development Bank (ADB) seminar during its 51st Annual Meeting in Manila, Philippines. This seminar was co-hosted by ADB, the International Monetary Fund (IMF), and Bangko Sentral ng Pilipinas (BSP).

"Governments in the region can improve financial inclusion by broadening access to basic digital infrastructure and providing an enabling environment for innovators and entrepreneurs," ADB President Mr. Takehiko Nakao said. "Policymakers should also consider ways to improve regulations, including protecting consumers against cybercrimes and fraud, while striking the right balance between innovation and financial stability."

Panelists at the seminar "New Technologies in Finance: Opportunities and Challenges for Asia" included IMF Deputy Managing Director Mr. Mitsuhiro Furusawa, BSP Governor Mr. Nestor Espenilla, Chair Professor at Korea National Diplomatic Academy Mr. Oh-Seok Hyun, and Director of Social Impact and Public Regulatory Affairs for the IOTA Foundation Ms. Julie Maupin.

Panelists discussed how fine tech, including new innovations like distributed ledger technologies, virtual currencies, machine learning, and big data, can improve financial inclusion. The lack of access to financial services is widely viewed as a key challenge for Asia's poor households and smaller firms. About two billion people in the world still do not have access to finance and half of them live in Asia and the Pacific.

"Fintech can help foster financial inclusion in Asia by its ability to reach rural areas, making financial services more affordable, and broadening access to small and medium-sized firms," said Mr. Furusawa. "Financial regulators will play a crucial role in creating an environment that promotes financial inclusion while mitigating the risks."

Seminar participants also agreed that new technologies hold promise for bringing financial services to poorer communities and for overcoming the challenge of obtaining the collateral needed to access formal credit markets. International financial institutions such as the IMF and ADB can play a significant role in supporting countries as new technologies are introduced.

"There will always be a trade-off or a healthy tension between security and convenience as well as efficiency and financial integrity. That is why the BSP has established a regulatory environment that allows innovations to flourish, at the same time ensures that risks are effectively managed," said Mr. Espenilla. "BSP's regulatory approach is shaped by three core principles ensure that regulation is risk-based, proportionate, and fair; maintain active multi-stakeholder collaboration, and ensure consumer protection."

ADB supports many fintech initiatives in developing Asia. In 2017, ADB, Cantilan Bank, and Oradian, an IT company, launched a pilot cloud-based banking platform to enhance financial inclusion in Mindanao, Philippines. This effort was made possible through support from BSP, which authorized this innovative approach to introducing new financial technologies in the banking sector.

To lead efforts to promote and further mainstream digital technology in ADB projects and programs, ADB established a new Digital Technology for Development Unit within the Sustainable Development and Climate Change Department in March 2018.

COUNTRY :
Philippines

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