Conventional financial service and banking providers have called for improved know-your-customer (KYC) protocols in a bid to build a more powerful digital environment for the world of finance – and want to collaborate with innovative partners on sandbox projects.
Today, in a Bank for International Settlements (BIS) Innovation Summit 2021 session held online and named “Banking on a new digital ecosystem – new opportunities, business models and regulation,” Noah Pepper, the Irish-American financial services and payments company Stripe’s Business Lead for the Asia-Pacific region, called on regulators and politicians to “boost financial inclusion with more seamless, but more secure KYC.”
He added that “more clarity” of legal networks and frameworks and more regulatory sandboxes “would drive innovation and speed of development” for the industry.
However, Pepper added that in the case of matters such as data-related regulations, it was safe to assume that larger companies would benefit from more stringent regulations, but that these would ultimately hinder smaller players.
His thoughts were echoed by Kahina van Dyke, the Global Head of Digital Channels and Client Data Analytics at the banking giant Standard Chartered and a former Ripple executive.
Van Dyke hinted that she agreed with Pepper’s assessment of the importance of KYC development and added that in order “to innovate,” the industry “needs co-creation systems,” as well as a “cultural mindset” and a “collaborative ecosystem.”
She claimed that anyone seeking to exercise control over the digital economy would need to “collaborate to control,” and called for more “data and regulatory sandboxes,” adding that “safe experimentation requires working together as an industry” – with more “aggressive and purposeful” collaborations.
But Henry Ma, an Executive Vice President and Chief Information Officer at WeBank, which calls itself China’s first “digital-only bank” and is 30% owned by the WeChat operator Tencent, instead claimed that as “digitization is inevitable” in the financial sector, politicians needed to get their checkbooks out.
Ma called on regulators and governments to “invest more” in a bid to create “more infrastructure” for “trustworthy data ecosystems.” He added that “more coherency on regulations” would also help the sector.
Ma added that WeBank is currently investing in blockchain technology as part of its strategy to solve data-sharing issues that will see exchanges “become less and less possible” as regulators – particularly in East Asia seek to squeeze tech companies on data storage-related matters.
Data-related issues have already seen the Chinese government pit at loggerheads with a number of the Middle Kingdom’s tech giants in recent months. Tencent, which operates WeChat Pay, is thought to be one of the firms in the firing line over its data policies.
Ma said that “assuming that data will be siloed due to regulations,” WeBank “believes in building up a network of partners” that will let stakeholders build sub-models and work together to “build models” for initiatives such as “fraud detection” – all “without exposing the nature of the data.”
Pepper, meanwhile, opined that “data regulations will create tension where there is a desire to keep data secure and a desire to create access to data,” with conflicting motives pulling players “in different directions.”
Douglas Arner, a law professor at the University of Hong Kong and the session’s moderator, added that “digital [finance] “cannot be the same for everybody from everywhere,” noting that as “all local systems do matter” it may be “hard to build unifying platforms.”
And Standard Chartered’s van Dyke opined that when it came to matters like these “one-size does not fit all,” claiming that financial players “must understand the local restrictions.”
She concluded that the bank was “on the more conservative side when it comes to” data-related matters, but claimed that her firm was “investing in machine learning” and other industry 4.0 tech advances as the bank “automates more processes” – with a number of “anticipatory investments” already in place.
____
Learn more:
– Updated FATF Crypto Guidelines Still ‘Predicated on Centralized Control’
– DeFi Sector May Face Threat from New EU Crypto Regulations – Survey
– If a CBDC Is an ‘Instrument of Control,’ It’ll Fail – Expert
– Bitcoin and Litecoin Move Closer to Their Privacy Improvements
– BIS and SWIFT Intensify Race With Crypto For Cross-Border Payments
bestadmin
