ADB VP: Fintech can help reduce inequality, drive growth
Fintech has been seen as a disruptive technology that may shape the financial industry in the future, Ahmed M. Saeed, vice president of the Asian Development Bank (ADB), said on Friday.
Saeed, who is responsible for the ADB's operations in East Asia, Southeast Asia, and the Pacific, was speaking in Beijing at the New Economy Forum which focuses on emerging economies and technology.
He was sharing his views on using new initiatives to drive the new economy and promote inclusive growth around the world.
He emphasized the importance of the role of fintech in reducing inequality and providing services to people who are locked outside of the financial system in that they can't satisfy banks' KYC (know your customer) procedures.
"The topic of financial inclusion and fintech development is an enormous one with lots of ground for further progress," Saeed said. "I think it's one of the things that the ADB has the capacity to do as an institution. (That) is to engage single or multiple governments at a policy level, but also to implement very specific technical solutions on the ground."
The banking executive shed light on the ADB's role in helping economies across Asia. The bank has used different ways including crowd sourcing and building a new venture fund to respond to development challenges. It has also signed an MoU with Chinese multinational Alibaba to work out solutions for small farmers across China.
Regarding remarks by Wang Qishan, the Chinese vice president, about promoting inclusive growth globally, Saeed said to do that, governments should play a critical role in innovation ecosystems.
"The path to innovative growth really begins with R&D spending," he said. "And if we look at China, the level of (its) R&D spending has gone from almost nothing 20 or 25 years ago to almost 300 million (U.S.) dollars last year."
China has a healthy legal and enabling environment including problem-solving plans. It also includes letting people benefit from the rewards of their initiative. The broad innovation ecosystem within China is clearly getting better and is healthier, he said.
In terms of the future outlook, Saeed pointed out that countries rise or fall together.
"If you look at Europe for every one percentage point of growth in one country, that directly related to three-quarters of a percentage point of growth in the next country. So when one country grows, it immediately benefits its neighbors," he added.