The continued growth and development of financial technology (fintech) is deeply affecting how individuals and businesses consume financial services and how they expect to interact with financial-service providers.
New innovations, including but not limited to advanced mobile payment technology, alternative lending, and artificial-intelligence-driven solutions are being adopted at an extremely rapid pace. From streamlining processes and operations to providing previously unavailable services to underbanked populations, the world is on the cusp of a technological revolution that will forever alter the financial-services landscape.
While fintech is undoubtedly a global phenomenon, it would be erroneous to assume that its adoption is occurring at a uniform pace across the globe. As other regions, including the United States, continue to examine the proper legislative and regulatory approach to apply to the sector, governments in Asia have been quick to adopt policies that have helped the region move faster down the proverbial yellow brick road of fintech innovation.
In recognizing that the development of a thriving fintech sector could represent a competitive advantage vis-a-vis regional and global competitors, governments in Asia have been quick to establish official mechanisms to guide activity. For example, both Singapore and Hong Kong have created government initiatives to serve as points of contact for fintech-related information.
Singapore’s FinTech Office, a collaboration among various government entities including the Monetary Authority of Singapore, serves as a one-stop shop providing interested parties with regulatory, business, and market information essential to entering the market.
A similar mandate is found in Hong Kong’s FinTech Facilitation Office, a department within the Hong Kong Monetary Authority that serves as a conduit for stakeholders to address regulatory and market conditions as well as promote innovation.
Such initiatives not only demonstrate policymaker commitment to the sector, but facilitate the market entry and participation of eager entrepreneurs.
Globally, policymakers are searching for solutions that will promote innovation while at the same time protecting consumers and markets. The rapid adoption and disruptive nature of new technologies often create new and unforeseen policy challenges that can threaten not only the speed of innovation but consumer adoption.
Governments in Asia have been quick to recognize policy challenges and have instituted programs that effectively allow companies to test their innovations within a supervised, sometimes less regulated environment. Known as “regulatory sandboxes”, such programs support innovation and allow regulators to explore, on a smaller scale, the regulatory, policy, and societal impact new products may have if adopted more broadly.
Malaysia’s Bank Negara, the country’s central bank, Indonesia’s Financial Services Authority, Australia’s Security and Investment Commission, the Monetary Authority of Singapore and the Hong Kong Monetary Authority have all instituted domestic sandbox programs to evaluate new fintech products.
Not to be left behind, South Korean President Moon Jae-in recently announced his desire to institute a similar program in his country.
The use of “regulatory sandboxes” across the region signals an understanding by governments that outdated regulatory regimes can hamper innovation and that new technologies often require new regulatory approaches.
To help kickstart innovation, governments in the region have also been willing to provide funding for nascent fintech enterprises.
While there exists no shortage of private capital in search of companies with validated concepts, early-stage firms often lack the necessary resources to launch their ideas. Thus government grants and funding opportunities play an important role in bridging the funding gap.
For example, fintech innovators in Singapore can tap into financial resources provided by the Singapore Monetary Authority and SPRING Singapore, the country’s enterprise development agency, for funding opportunities.
Malaysia’s Cradle Fund, a government-owned non-profit, has recently broadened its mandate to move beyond grants and include equity financing for tech startups, including those in fintech.
In China, more advanced fintech startups have attracted financial support from state-owned enterprises; for example Ant Financial’s recent financing round included investments from China Investment Corporation (China’s sovereign wealth fund), and from the China Development Bank.
Fintech is a global phenomenon and Asian governments are using their financial resources to ensure home-country innovators are guaranteed a seat at the table.
The continued growth and development of the fintech sector have the potential to make a positive impact on much of the world. While other regions continue to debate an adequate policy response, policymakers in Asia have been quick to recognize the opportunity presented by fintech and have adopted policies that encourage continued and sustained fintech innovation.
The creation of fintech-specific government offices, the development of regulatory sandboxes, and the availability of state funding sources have gone a long way to propel Asia to the vanguard of fintech innovation. Governments in other regions would be wise to take note or risk being left behind. It is already happening.
The only Fintech that matters is digital fiat currency (DFC), that can be transported on other providers’ portals. This is also the technology we were waiting for for a world transition to the Chicago Plan revisited or full reserve banking. Sunshine on degraded landscapes makes a landscape give 50 times more output than input. (UNDP, 2017) The trouble is the UN and capitalism, driven by the Washington consensus, thinks this 50:1 productivity can return to the private owners of capital as a “return on investment”; that money can be based on debt, continuing the capitalist money form of the Federal Reserve driven world system based on debt. But debt and repayment of money are incompatible with restoring ecology. The 50 times greater output surpluses delivered to ecosystems from sunshine must remain with society and ecology if biodiversity is to be restored in the sixth extinction and humans live with dignity in depleted ecosystems. Recognising this problem, 32 central banks with China at the forefront are about to introduce a
digital fiat currency (DFC) that will supplement coins and paper notes and lead to full reserve banking and debt free sovereign money. (International Telecommunications Union, 2017) A massive conflict is thus in progress between Asia and Washington ( where there is no public central bank) with USD 70 trillion of western rentier capital seeking to be invested for profit either in continued Earth exploitation or in “nature” in the name of so-called green finance, whilst Asian countries and developing countries generally will be financing local communities directly from their central banks with debt free money as part of their strategies for
adaptation for life in the sixth extinction and global warming. Digital currency will be a facilitator for this central bank led drive to save humanity from extinction. Will
the USD and its affiliated currencies find a role for themselves at home to enable their societies to live in the sixth extinction? or will their owners continue to ravage the rest of the world’s society and ecology with their debt money newly liberated from their own country’s legal oversight and head off as marauders into so-called green investments in other’s people lands? Developed countries must use their currencies to serve only their own people and ecology whilst avoiding interfering in the biodiversity conservation and global warming adaptation strategies of the world. DFC will allow even central banks in the developed countries to put an end to polluting and destructive credit decisions made for profit.