“Progress is impossible without disruption” | RadioFinance

“Progress is impossible without disruption”

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Interviewed By Foo Boon Ping

This year's Innovation Leadership Dialogue focused on the challenges and complexities that leaders face as providers of stability in their respective organisations to drive incremental growth versus the imperative to foster an environment where true innovations that disrupt the current state can thrive and create new businesses.

At the Leadership Achievement Dialogue 2021, regulators and chief executive officers (CEO), chairmen, and founders including Banthoon Lamsam, Kasikornbank; Norman Chan Tak-lam, Hong Kong Monetary Authority (HKMA); Sum Sannisith, National Bank of Cambodia; Juda Agung, Bank Indonesia; Victor Li, Pintec; William Tanuwijaya, Tokopedia; Nikhilesh Goel, Validus Capital; and Nguyen Hung, TPBank, debated the inherent tensions between leadership that is expected to create stable and steady growth, and innovation which thrives amid disruptions, and the important role that regulators play in facilitating and harnessing innovations, while continuing to strengthen the resilience of the financial system.

The following key points were discussed:

Foo Boon Ping (FBP): Good afternoon, ladies and gentlemen. It has been more than a year since the pandemic struck and created unprecedented global mayhem. We hope you are continuing to keep safe during these extraordinary times.  

While going through an unprecedented time of change, the pandemic has utterly brought home the point that the future is digital. In the past few months we have witnessed an acceleration in the digitalisation of businesses, products, processes and experiences and with it came the unintended, but not to be unexpected escalation in cyber threats, attacks and fraud. The increasingly widespread adoption of emerging technologies like artificial intelligence (AI), big data analytics and edge computing will enter a new dimension with the introduction of 5G telecommunications in the new future. So whether migration to the cloud, open banking ecosystem and the maturation of blockchain technology will make central bank digital currency electronic payments a reality, what will be the future of commerce, banking, and finance in an era of central bank digital currencies (CBDCs), hyper-connectivities, personalisation and heightened cyberattack and threat? 

We look forward to discussing all these with you in our Innovation Leadership Dialogue. How do you innovate to stay ahead of these trends? We hope that you will help us make sense of the long term impact and significance of these transformational issues and how these help to clarify your own business focus and strategic priorities. 

I'm happy to introduce the chairman of The Asian Banker, Emmanuel Daniel, who is currently in Beijing, to say a few words.  

Emmanuel Daniel (ED): Greetings from Beijing. I've been here since October last year and I must say that to be in one of the major cities of the world where the future of how our economies are being shaped, is taking place, is actually an exhilarating experience.  

As all of you know, at the very highest award programme, we give away the Leadership Awards in sequence once every three years. So our chief CEO leadership awards are given once every three years, where we evaluate the performance of CEOs over a period of time. We assess leaders over a three-year period. In the years in between, in one year, we assess the promising young bankers – people with potential to become CEOs who are below the age of 40. Very interestingly, we've now ran this programme for many years and we've been able to track the promising young individuals over their careers. So when they become 50 and older, we see how many of them actually become CEOs. So that's been a very gratifying programme to be able to track careers over time. That leaves us with one more programme to run. What we've decided to do over time is to look at innovation as a theme. So this is not about leadership in terms of how well you are looking after your respective business as usual. But leaders who are able to take on brave decisions, shaping the future of their respective financial institutions, investing in technologies, but also innovations in different things like products and also reshaping the institution for the future. The innovation element does not rest on how you perform in your respective institutions every year. It has to do with what you are building in terms of how you will look like in three years, in six years and so on. 

We've been building our franchise in Africa, the Middle East and other emerging markets. So we're not just Asian and the word banker is no longer about bankers alone. It's about the new players, the challenger institutions and fintechs, for want of a better word. Those who are challenging traditional financial institutions. In fact, we've also started taking a view on cryptocurrencies, blockchain technologies and innovations taking place there, which are potentially going to disintermediate traditional financial institutions as we know them to be.  

FBP: We shall start our Leadership Dialogue. The first question is in terms of looking at the challenges of managing innovation in your organisation. How are you creating that environment? That culture of innovation? I would like to hear from Victor Li, in terms of looking at the transformation technologies that his company does with the industry, providing connectivity to small and medium-sized enterprises (SMEs), looking at credit management, improving processes. How do you create that innovation, culture and environment within your organisation? If we may get Mr. Li to share some of his insights to us.

Shaping the future of organisations

Victor Li (VL): We have to be innovative in supporting innovation. We do all kinds of things. On a  normal project, we encourage people to contribute ideas and we try to create mini projects and we incentivise people to do innovation. More specifically, I would like to talk about two programmes that we’re running.  

The first programme is what we call an incubator. So the people in the organisation, whether it’s directly relevant to what we are doing today or indirectly relevant or irrelevant, as long as they believe that is a good idea and create a value either to the customer or to the system. We actually invested in a mini project in the company to make sure we provide the facility, the resources for them to do a mini programmable logic controller, before we do further assessments or make bigger decisions from there. It’s like a hackathon. So we're on competition. If you have an idea, feel free to talk to your manager, talk to the company. We are a very flat organisation. Feel free to talk to me and we encourage people to basically raise new ideas and we will invest. 

The second programme is exactly similar to the process I just described. We also encourage people to have that kind of entrepreneurship to start their own business with the company. So if the idea is commonly supported by the community, we can create a joint venture. Basically, you start your own business, you become a partner of the company. 

The other thing we do normally is to make sure that we do not just deliver a system but we also create a value. We need to be disruptive. We need to get ideas. Ideas are important for innovation. People with different backgrounds and different ages, whether they are experienced or inexperienced – sometimes people without experience in the industry can have better ideas because they don't confine their ideas to the existing system. With that in mind, we strongly promote all these incentives and credit programmes to make sure everybody feels that innovation is important and they have the opportunity to participate in the innovations in the company. 

FBP: We'll move to our next significant player in e-commerce and big tech in Indonesia. William Tanuwijaya, you can also share your experience with innovation in such an exciting market in Indonesia. 

A culture of service

William Tanuwijaya (WT): So in running and founding a technology company, you need to be innovative. The thing that separates a great technology company with the ones that are not is that a good technology company needs to continuously evolve. This year you need to be better and make a difference compared to two or three years ago. Innovation comes from the people. Starting the company 12 years ago, we constantly invested on people with the right culture. Our culture consists of three DNAs or three values. 

The first DNA is the culture of serving, which is to focus on customers. We need to be problem solvers. Our product, if it’s not solving any problem, will not be relevant to the customers, especially in the past 16 months during these unprecedented times, where we need to change our product and services to fit and serve the needs of the customers. 

The growth mindset

The second DNA is a culture of continuously learning – the growth mindset. Technology changes very fast. Business models change very fast. Oftentimes, you need to unlearn to be able to learn something. The ability to see the glass half full is very important. This is where the growth mindset is key. The third is the culture of innovation, which we call ‘make it happen, make it better’. There are no perfect solutions from day one in a technology sector. You need to continuously iterate. 

In the past 16 months, Indonesia has faced very challenging times. We are an archipelago country where 60% of our gross domestic product comes from small businesses. So there is a big dilemma between the health crisis or the economic crisis. But we also see during these times that digital adoption and transformation are at an all-time high and produce businesses that adopt technology fast enough than they can actually have both. There is no dilemma between the economy and health anymore. They can continuously run and operate their businesses and their customers can continuously enjoy the services without sacrificing health at home. So I really believe that in these challenging times, we are to be reminded again that necessity is actually the mother of invention.

ED: Necessity is the mother of invention, of innovation. You need to keep faith with your customers or to the people you're serving, the service element. That was very good. 

My co-director, Gordian Gaeta has a few wise words to start us off in terms of what you see to be leadership in innovation today. So we just want to go around once to get a sense of what innovation and leadership has meant in your careers. So Gordian, how would you lead us in this dialogue? 

Leadership vs. innovation

Gordian Gaeta (GG): It's interesting just by hearing the first contributions that the problem lies in the fact that leadership and innovation are contradictory. These are actually at the opposing ends. By definition, leadership requires a group of people and a group of followers that are inspired by a purpose and by a vision. This requires courage, fortitude, and administration. Innovation, on the other hand, always comes from a minority, from a small group of people who actually don't follow the traditional pattern. By definition, they cannot be led, they can only be encouraged. So the problem that we have, and it was interesting that you so far have addressed that in your own ways, is that innovation can't be organised in the sense that it can't be mandated and it cannot be managed in the same way as an organisation. 

If we look at the pandemic, because it's so topical, you can see that none of the countries, economies, and multinationals managed the leadership well. Most of the innovation happened in organisations: the vaccines, the DNA sequencing. All of these happened in laboratories with scientists and in smaller organisations. Also, that didn't go that well. At the intersection, we found exactly the dilemma we find when we have innovation leadership. That is something that we need to think about. 

Technology is the best enabling condition that we can find. It is a necessary condition. But like with many other things, we have to use it in the right way. So when we have AI, it will never substitute for innovation. When we have big data, it will never substitute for the ingenuity of people. And if we have processes or cyber currencies, it will never substitute for the regulator that has to make sure that the macro-economic system works. 

So I think that the challenge and the tension between innovation and leadership is one of the most important aspects. The first colleague mentioned that they are willing to invest in ideas of employees. That clearly demonstrates that these are different entities. The very best leaders are not necessarily the very best at innovation and the very best innovators are certainly not the best leaders. The challenge is to put the two together so that actual progress is made. This is just to set the scene that this is a very difficult subject and requires a lot of thought and ideas. This dialogue is going to bring about it and it already has some of the best ideas.

ED: Gordian, as you were speaking, the person I had foremost in my mind was Khun Banthoon Lamsam. Khun Banthoon and I met at the start of The Asian Banker in 1996. In that period, he was already seen as a leader and a disruptor in the financial services industry in Thailand. Over time, even within the Thai community, he was seen as someone who rocked the boat. Someone who doesn't accept the status quo. Someone who is troublesome to have around because he's always pushing on new ideas.  

We will be celebrating his lifetime achievement. And I personally had the privilege of having observed how he was a leader in his own right, a maverick. He was an institution in himself then he created an institution around himself. Khun Banthoon has not just been an innovator and a disruptor in his own right. He’s created a culture of disruption and breed as it were, who has been building on what he's been doing. Today he sort of sits as a sage on top of the hill, like the quiet one up there. So I just would like to have a few words from Khun Banthoon on what leadership meant to you in your career and where do you think you are right now?

Banthoon Lamsam (BL): I have retired from the bank after 40 years. The 1997 financial crisis was a wakeup call. Before that, Thais were enjoying the periods of entitlement that the people felt that things can be done in any way without looking at the other angles of the matter. So when the financial industry in Asia collapsed in 1997, we had to grow up fast. That was really my first step in rethinking the way we go about getting our organisation to work. It turned out to be a good experience. I hope I get to do it only once in my life. And I think that's true now, because I'm out. But at that time, we had to make sure that we stop the bleeding in terms of the losses. We barely made through that and to get the people to organise themselves around the effort of stabilising the organisation and also working with the state to stabilise the financial system, which I had to do in the capacity as the chairman of the Thai Bankers Association at that time.  

Then we had to handle the task of recapitalisation, which we did. We never had to do that before. We had to go to international markets. Kasikornbank led the way in 1998, along with Bangkok Bank. It was a very  close call. People were very sceptical of how Asia would come around. Luckily, we were able to raise what today would be a small amount of money. But together, the two banks raised $2 billion of capital at the time from international markets and that was a bulk of the funding that saved the Thai banking system. Of course, we had to work through several years of loans management, bad debt management, which we did.  

So overall, it took about three to four years for Asia to come around. Luckily, we survived and then had to rethink what's new. I think the old risk management regime has to be done away with and people have to come in with a new mindset of how to manage risk. The last two decades have been back to growth, but of course with caution. Growth in loans, growth in expanding geographically around Asia led the way. Now we run into different kinds of challenges – as I was leaving the organisation – it’s the disruption of the new kinds, not just bank loans but other ways of going about doing the financial service business. The key is to get the people to rally around what is important at that particular time. First, saving the life of the company, saving the life of the system and then making sure that we are on a more solid way of managing the new strategy.  

ED: Hearing from you Khun Banthoon is like remembering all those years and walking through all those years. As the 2007-2008 global crisis came along, the Southeast Asian countries were found to be resilient. Because a lot of the discipline that you talked about were already in place and to hear you say it, we are actually looking at people like yourself and the leaders in whom this discipline has been instilled. It also explains a little why you would be cautious about the innovations that are being thrown at the industry today. In fact, let's keep going to the different people who have had different experiences. 

Norman Chan, who was chief executive of the Hong Kong Monetary Authority during an amazing period, linking into the Chinese economy and still maintaining its global resilience as a financial centre. Give us a sense of what you were dealing with, Norman? And the satisfaction of your own career, how would you describe your own achievements?

Norman Chan (NC): I do think this is still the only one mission that we central bankers, advisors must achieve – that is to ensure we have financial stability. That is something that all of us must work very hard to achieve. 

When I took over as chief executive in 2009, there was stress after the global financial crisis. We were recuperating. There were a lot of concerns about whether this banking and financial crisis would recur anytime soon. The international collaboration under G20 Financial Stability Board has done a lot to strengthen the banking system, to reduce the vulnerabilities. For Hong Kong specifically, we face a different set of problems because by and large, the Hong Kong financial system was unscathed, luckily, during the financial crisis. Of course, we were hit and impacted. There was a huge amount of liquidity flushing around, searching for yields. Understandably, the Hong Kong real estate market became very hot. I foresaw that would become a source of vulnerability for the Hong Kong banking system because we have a very accelerated boom and bust cycle back in the 1990s, leading to the Asian financial crisis. So I was quite determined from the very beginning that we must do everything we could to prevent another leverage, or credit-fuelled property bubble from recurring again in Hong Kong. 

During my 10-year term, I've introduced several rounds of macro-prudential measures to tighten the supply of credit by the banks to the real estate sector so that the banking system, at least in terms of the equity portion, or the down payment that buyers must come up with, has gone up to almost 50%. That means, in theory, if the property market should collapse, then at least the banks will not be hurt that much as they did in 1997. 

Looking back, I think this is a really important measure because Hong Kong has gone through very difficult periods in the last two years. We have our own social, political issues and we, like everybody else, were affected by the pandemic and the economy was badly hit last year. But our banking system or financial system remains pretty resilient and robust, so far. So I think the highlight is a critical point for others’ reference.

ED: As a central banker, as well as a regulator, you had the very grave responsibility of balancing macro-prudential as well as the direction of the economy. I'm sure that central bankers have this huge responsibility of ensuring more equitable society, ownership of property, affordability of property, as well as inflation, the employment situation in Hong Kong, and the profile of the employment market in Hong Kong. There’s a lot for you to do. The HKMA is an institution that is regarded with distinction worldwide and under the leadership that you provided, and the team that you have, an amazing group of dedicated individuals dealing with a whole range of issues. So congratulations for all that you've achieved in your career.  

Let's ask Khun Sum of National Bank of Cambodia. Cambodia is very interesting because it's like the frontier of innovation in Southeast Asia as well as in emerging markets as a whole. Give us a sense of what the National Bank of Cambodia (NBC) is working on. How are you embracing innovations that are going to make a big difference to a country like Cambodia?

Sum Sannisith (SS): Cambodia's economy has been hit hard by the COVID-19 pandemic since 2020, especially on the key pillars of economic growth, namely tourism, gaming and the construction sector. This unprecedented shock contracted economic growth by minus 3.1% in 2020, after two decades of high growth around 8% per annum. During the first half of 2021, as the pandemic unfolded, there was a community outbreak in Cambodia and the region’s economic activities have continued to suffer. The continued economic slowdown has put pressure on the exchange rate and the banking sector. Our exchange rate has experienced the depreciating trend and we have intervened in the foreign exchange market to stabilise the rate. The stability of the exchange rate has contributed to price stability in our context of high notarisation. As for the banking sector, the drop in income of population has affected their repayment capacity. In this regard, the central bank has allowed banks and micro finance institutions to restructure loans for individuals and viable firms that are subjected to short term liquidity constraints in order to lessen their burden at the same time. At the same time, NBC has cautiously eased monetary conditions to provide additional liquidity to banks and financial institution so that they can maintain the credit flow in supporting economic activities and to better manage liquidity risks. 

The loan restructuring programme is ongoing smoothly and was done to avoid a cliff effect in non-performing loans. In addition, our payment system has been modernised to improve the efficiency of payment transaction. It has actively facilitated businesses to promote financial inclusion and prevent the spread of COVID-19 by allowing virtual transactions. 

For the second half of 2021, we expect that the economy would gradually recover, given the paths of the global economic growth and rapid administration of vaccine for the Cambodian people. Cambodia has already administered at least one shot of a COVID-19 vaccine to over 6.4 million residents, equivalent to more than 60% of the Cambodian adult population and more than 4.3 million have already been fully vaccinated. At the same time, children and adolescent from ages 12 to 17 years old will soon receive vaccines as well. This provides us with optimism in turning the economic growth to positive in 2021. Despite this positive expectation, uncertainties remain high given the ongoing outbreak of COVID-19 in the region and around the globe. The National Bank of Cambodia remains vigilant and stands ready to implement supportive measures to economic recovery. We will also keep on improving our banking supervision towards risk base and forward looking that will help to further strengthen the resilience of the banking system.  

Resilience is the key

ED: What you've said is very interesting and it reinforces that the job of the financial sector is firstly, not even innovation because even as innovation is underway around the world and a lot of changes are taking place. Resilience is what underpins the ability of any society to be able to absorb and benefit from the innovations that are coming through. Listening to the deputy governor of the National Bank of Cambodia underscoring resilience reminds all of us the importance and the role of central banks and the financial system. 

Speaking of central banks, the largest central bank in Southeast Asia, Bank Indonesia, is headed by Juda Agung, who's the assistant governor and head of the Macro-Prudential Policy Department. Give us a sense of the dynamics between innovation and resilience as you see it and the issues in Indonesia today. 

Juda Agung (JA): There are a few lessons that I would like to share in this forum. First, in the midst of current extraordinary and unprecedented times, in addition to extra vigilance, we at the Central Bank have to embark into unconventional, innovative and out-of-the-box policy thinking and policy formulation.  

After COVID-19 hit the country, the coordination and the policymakers among authorities and within the institution itself in the central bank were key to be more effective in policy-making. A mix of monetary and macroprudential policies, as well as policy regarding the digital economy have been the key success factors in maintaining stability and at the same time, to boost the recovery of the economy. In this regard, the strong and decisive leadership is definitely required. The ability to effectively coordinate with other government agencies and private sectors as well as international partners is also very important. Second, I would like to highlight the importance of strengthening policy synergy between domestic authorities to enable effective implementation of support measures. 

In Indonesia, the establishment of a financial system stability committee allows for the policy synergy to be conducted in a swift and timely manner. The vital importance of global coordination and global cooperation, including participation in the regional and international forums, enhancing information sharing arrangement, as well as strengthening financial safety nets through regional and bilateral swap arrangement are also quite important. Regulatory cooperation will remain critical to address the global challenges posed by ongoing digitalisation of finance, climate risk, cyber risk and operational resilience.  

Last but not least, we are only as strong as the weakest link. The effectiveness of vaccine rollout and resolute health measures will continue to play a key important role and prerequisite condition for sustained economic recovery. Uncertainties are rising and a prolonged resurgence of the virus may raise that level and limit policy space. Thus, we need to remain vigilant towards a new source of vulnerabilities and be agile in adopting innovative policy instruments to address structural economic challenges and development in the new financial system landscape. 

ED: Your comments are amazing. As good as the weakest link. We have to remember the journey that Indonesia took many years to build these linkages domestically as well as globally. Today, Indonesia is an amazing economy.  

Nguyen Hung, the CEO of TPBank, whom we've recognised this year as the leader among CEOs, all the CEOs in the Asia Pacific region, Nguyen, give us some challenges that you face at the ground level institution yourself and TPBank.  

Nguyen Hung (NH): Thank you very much and I am very honoured to be here to share my experience in turning a small bank, a traditional bank into a digital bank in Vietnam. Last year, even with the COVID-19 pandemic, the banking industry in Vietnam has seen a fruitful year. In the first half of 2021, the banking industry’s profits increased by 14% or 15%. 

Now in Vietnam, digital transformation is a hot trend in the banking industry. We are very proud that we are a leading bank in terms of transformation. We began this process early, at least five years ago. We invested a lot of money for digital and mobile solutions for our customers and not only for product and services but even for the internal processes. We tried to transform all our processes in a digital way. We tried to reform our internal processes with breakthrough innovation. We tried to use and apply these technologies for small use cases or mini projects, big data, machine learning and blockchain into our small projects. For blockchain, we tried to have a contract with other institutions like in Japan or in Korea to transfer money from overseas to Vietnam. 

We used blockchain technology. Now, we’re the first bank here with this new technology for money transfer and foreign currency remit in Vietnam markets. And of course, we’re very proud that we have automated nearly 400 kiosks throughout Vietnam. These have allowed our customers to do transactions 24 hours per day and seven days per week. These allowed our customers to do everything like in a traditional counter. Now nearly 92% of all transactions of the bank are done via digital channels. Of course, we have some challenges with the digital transformation journey because the legal framework of the government is so narrow and we have to survive with the current legislation. And of course, there is lack of IT human resources in Vietnam because now, not only the banking industry but even other industries need IT human resources. We have to pay more to recruit talents for the new technology. We hope that next year we have turned our bank into a fully digital bank. We hope that most of our processes will be paperless, digital and fully online and the customers will be able to do everything, all the transactions with us online through our digital channel.  

ED: You brought up something – we are all only as good as our people. That's our weakest link. Regardless of how large an organisation or how small, whether you're a central bank, a bank, a fintech company, a challenger bank or an institution like The Asian Banker, we are all only as good as our people. That’s one area where leadership is most needed. 

Now, let's ask our last comment, but this one is from someone whose business is going to threaten traditional banks. This is what I meant by the fact that we’re called The Asian Banker but we’re no longer just ‘banker’ because when we think about leadership in finance, we're also talking about institutions that are going to disrupt the traditional players. So Nikhilesh Goel, the co-founder of Validus Capital, whose business is to match funders to borrowers on the SME of the equation, how's business for you? Are you disrupting the banks? And how hard is life for you as a leader?

Nikhilesh Goel (NG): As a startup, life is always hard Emmanuel, but we cannot complain. I think COVID-19 has hit everybody hard. We were very cautious at the beginning but we have used it as an opportunity to grow. We are very proud that our business across countries has grown anywhere from 100% to 400% during the COVID-19 period. We see ourselves as challengers who are operating in white spaces left aside by banks. When we look at SMEs and their financing needs, we see that traditionally, SMEs have always been part of either the retail or the corporate banking structure within large banks and therefore, somewhere, their needs have not always been serviced. So our only goal is to go in, find out whether it is the unbanked SME or the underbanked SME. What are their needs in terms of their working capital requirements? How best can we service them, using non-traditional data, using technology, whether it is artificial intelligence, machine learning? Of course, everything being by way of doing it through a digital platform and then connecting them to various funding sources. 

ED: You're attacking what you call white space areas, which traditional institutions either haven't reached out to or maybe to whom there’s cost effectiveness? There's a whole range of conversation we can have around what you do. Would you call yourself a peer-to-peer (P2P) lender or a peer-to-SME lender? Are you in that space? How would you categorise what you do? 

NG: The P2P space started off as taking monies from many and giving it to many. That was what the model was 20 years ago. Now the term that is invoked is marketplace lending. So we operate a marketplace where there are a lot of small and medium enterprises and their borrowing needs. We source them to the credit evaluation, package the loan and then have funders fund them, which are primarily institutions. It could be banks, family offices, hedge funds, or even high-net-worth individuals. So yes, you can call it a marketplace or it can be intelligence to business technologies (I2B) if we have to coin new terms every day. 

ED: I had warned the industry that the day is coming when we will be including people like yourselves into the profile of the financial services industry as an equal player. I guess the day has come. So thank you all for your comments. 

I will ask my erstwhile colleague, Gordian, to sum up this conversation that we've had.  

GG: I agree. I think we have seen on this stage alone, the future of the financial services industry. On the one hand, we have the central banks, which by definition, have to create stability but need to keep pace with the developments of the market. But they themselves are limited in true innovation that is disruptive to the business processes. On the other hand, we have entrepreneurs and businesses, fintechs they call these, but in fact, these are financial institutions in their own right that would actually, as the last colleague said, occupy white spaces. But in occupying white spaces, they provide some disciplinary measures to the banks and show the banks that not all that has been done in banks are actually all inclusive or relevant in the financial system.  

Aligning with disruptors

GG: As the last colleague mentioned, banks are very well managed. They tend to be well led in many cases. They have realised that it is better to align themselves with disruptors than it is to actually compete with the disruptors. 

What struck me in this discussion is that the future is very much that the traditional financial institutions will become bigger and by definition, more stable. They will align themselves with disruptors, which will tend to come from different parts of the financial system. The regulator will provide the overview and make sure that these challenges between these disruptors and stability providers actually create progress. 

As I said, all progress is created by disruption and is created by smaller teams of people who have to persevere and endure. This dialogue has shown very clearly that we are moving in the direction of aligning continuous disruption with the great stability of the banking system. At the same time, we have three participants who are not fazed at all about that. They are marching in a direction to either occupy white spaces or improve the services and the technology that comes to the customer. For them, it's all about customers and it's all about convenience. These two tracks, when they merge, will shape the future of the banking system under the supervision of the central banks. 

A progressive financial system 

GG: For the central banks, the challenge is to keep up with the developments. But given the quality of the central banks, I have no doubt that they will be able to do that. In a small discussion forum, we have actually seen the tracks of the future of the financial services system, which as you said Emmanuel, doesn't always include banks. It may include non-banks, financial players. It may include technology companies, and other players but they will all become one part of a new financial system that will hopefully be more inclusive and cover more of the white space. Because in my view, just as a last point, the future challenge of the financial system is to become more inclusive in terms of customers and of the needs of the world. That means financing the things that help us, the repletion of our resources, the combat we have against the changes in the climate, and becoming a much more integrated part as opposed to chasing the top end and most profitable segments of the market. The disruptors and the innovators and the banks together will achieve that, with some years to go. But I think we have an interesting perspective that the people on the podium here are the future of the financial system.

ED: Well said.

Keywords: 5g, Cbdcs, SMEs, Plc, Asian Financial Crisis, G20 Financial Stability Board, Covid-19, P2P, I2b


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