The future of fintech will see continued “evolutions rather than revolutions”, with authorities likely to continue a cat-and-mouse game when it comes to regulating the rapidly expanding sector, the dean of Oxford University's Saïd Business School Peter Tufano told CGTN on Thursday.
To judge the development of fintech going into the next decade, the next generation of technologies like artificial intelligence, machine learning and blockchain need to be looked at closely, Tufano said on the sidelines of the Boao Forum for Asia in Hainan Province.
Tufano said that fintech would see a greater reduction of fraud as well as a better provision of credit. However, the past few years have seen uneven development of fintech around the world, as well as an uneven application of fintech across society, with Tufano giving the example of older people being isolated from new technology.
While China's rapid uptake of fintech can be connected to a “more liberal regulatory approach”, Tufano said that “the next-best alternative” factor also played an important role. While developed economies already had an established card system that worked effectively, China and other emerging economies lacked a close alternative.
In terms of regulation, Tufano said that he expected a “regulatory dialectic”, where authorities would continue with a “cat-and-mouse chase… across countries and cultures” to keep up with changes in fintech, “and in some cases overreact”.
A separate discussion panel on the “Opportunities and Challenges facing Fintech” at Boao on Friday saw Ma Weihua, former president and CEO of China Merchants Bank, describe how banks and other financial institutions are “turning into tech companies” because of the expansion of fintech, a view shared with Ellen Richey, the vice chair and chief risk officer of Visa.
Richey said that a “digital revolution” was bringing more people into the financial system, and pointed to the changing ways in which money is being stored as a value, with a historic transformation from gold to paper money and now into the digital world.
The rise and fall of Bitcoin show both the potential and challenges facing money in a digital form. Professor Whitfield Diffie, a Turing Award-winning scientist known as the “father of cryptography”, said that cryptocurrencies represented an effort to “find comparable mechanisms” in the cyber world from the physical world.
While ruling out Bitcoin as a viable digital currency because of its volatility, Diffie said that it did show a glimpse of how to “eliminate centralized systems that can fail”.
Li Dongrong, the president of the National Internet Finance Association of China, said that having unified standards across the fintech sector was “becoming increasingly significant”, particularly in terms of cross-border fintech.
Governor of the Bank of Thailand Veerathai Santiphrabhob agreed on the need for more unified standards, saying if “different banks have different standards, the system will become more fragmented”.
He pointed to the success of the government-backed mobile payments system PromptPay, a platform currently used by “47 million out of 67 million Thais.”