Financial executives explore macroeconomic trends, artificial intelligence, emerging types of currency, policy long-term viability, a...
Financial executives explore macroeconomic trends, artificial intelligence, emerging types of currency, policy long-term viability, and other topics.
The financial technology (fintech) sector encounters challenges related to governance and sustainability as it keeps developing and implementing technologies such as artificial intelligence (AI), asset tokenization, and digital payments, among other innovations.
"Digital technologies focused on core infrastructure, electronic transactions, digital identification, secure data, tokenized assets, and code-driven currency as the foundation of the emerging financial system and as a crucial driver for not only financial operations, but nearly every aspect of the economy," statedRavi Menon, chairperson of the board of directors, Global Finance & Technology Network (GFTN).
Menon also serves as an advocate for environmental initiatives in Singapore and previously held the position of managing director at theMonetary Authority of Singapore (MAS).
"So, I believe we are on the verge of a new phase of a significant advancement," Menon stated. Singapore Fintech Festival 2025during the "Steering the Global Future" session taking place on the Festival stage on 14 November.
Although developments in financial technology offer significant advantages, they encounter regulatory and sustainability issues, he said to leaders from the Bank for International Settlements (BIS) andAnt Groupduring the meeting, which was led by a writer and professorDr. Razeen Sally.
Agustin Carstens, former BIS general manager, stated: “I believe regulators and authorities need to adopt innovation at this point. There are instances where the authorities have managed to keep up with the speed of innovation, which is evident in the ecosystems they have created. MAS has welcomed innovation, allocated significant resources to it, and built a robust team of skilled professionals to carry out the work.”
The same approach should be applied across various other regions. We must adopt innovation in a manner that ensures its safety, suitability, and enhancement of well-being, without becoming a significant obstacle in the advancement of new ideas.
In terms of sustainability, Menon expresses the desire for AI within the financial technology sector to reduce carbon emissions, as AI data centers consume significant amounts of energy.
"It's not feasible to consume all the world's energy resources just to perform tasks more efficiently. Therefore, this phase of AI development will ensure its sustainability," he stated.
In addition to AI, he also mentioned that electronic payments and asset tokenization have enhanced the efficiency of transactions.
Eric Jing, chairman of Ant Group, stated: “Genetic AI is set to experience significant growth. I believe that currently, agents can assist you in purchasing a product or helping you make a reservation and pay a deposit, which serves as a driving force for agentic payments to ensure a seamless customer experience, correct? However, this is not the entire picture.”
That's only the start. We are witnessing agents within multi-agent systems or genetic systems collaborating, enabling them to carry out more complicated tasks, correct? So by performing these tasks, they will definitely generate revenue, which we will receive. Then, this payment will be distributed among all the agents involved through agreed-upon terms or via a smart contract. I believe the agendic payment model we have is certainly going to grow rapidly.
I believe there are several scenarios related to AI, especially when discussing tokenization. I see two main points. First, the tokenization of money. Tokenizing money will definitely facilitate global, real-time settlement. You know, cross-border transactions. This will particularly benefit small and medium enterprises or companies that want to engage in global trade sooner. Tokenizing money is number one on the payment side.
Secondly, on the asset side, the process of tokenizing different assets onto the blockchain allows for a more efficient, transparent, and trustworthy exchange of these tokens across markets and institutions.
The committee talked about the future of financial technology. Here are some excerpts from their discussion:
Sally:Welcome to the discussion on Shaping the Global Future. The questions I have for the panel primarily focus on the upcoming decade of global development, innovation-driven, what kind of framework will this innovation-driven growth necessitate, and how can we create or modify these frameworks as we go?
JingWhen discussing AI, its effects on our financial services are significant. Financial services is indeed a data-intensive and language-heavy sector. Therefore, it's clear that Generative AI will have a major influence on reshaping the financial services industry. I believe there are several possible scenarios that could unfold.
One is the effect of AI on financial services, not limited to a single area, and numerous companies are already implementing it. For instance, AI is used for risk management as it needs to analyze unstructured data, and also for anti-fraud measures to enhance customer experience. Therefore, AI is certainly going to influence every sector. In other financial services, I believe it significantly improves the efficiency of financial institutions, and these benefits will be passed on to their customers, making services more accessible. On the consumer side, I think eventually AI will be widespread.
Sally:I would like to look at Augustine Carstens' views on the future of money and the future of public policy and regulation concerning money.
CarstensMoney must possess three characteristics. Can you list them? Medium of exchange, store of value, unit of account. That has changed. I mean, you need a form of representation. Of value that fulfills those functions. Now, the real question is, do we have money with the technological representation that society and modernity requires today, and also, what are the possibilities that technology offers, as you mentioned, through time and money, initially, was just the exchange of goods and services.
Then there was paper. Now we have digital records of imbalances, and technology is introducing entirely new opportunities. At the same time, you can see that the economy and society are changing today. What society needs, for instance, as Eric mentioned, is that we will coexist with AI, which means we need a form of money that can meet the demands of such transactions, provided that money remains secure and reliable. Therefore, the major challenge we face as a society, especially within the public sector, along with cooperation from the private sector, is to create a representation of money that incorporates technological advancements, ensuring that all forms of money possess these qualities.
Sally:What do you believe have been the significant changes that have transformed economic growth so far, before moving on to the next decade?
Menon: I believe that from around 2015, we began to notice this trend. I think the beginning was the mobile phone, which provided significant mobility. It combined a large amount of processing power in the hands of almost everyone who owned a device. The growth of broadband connectivity and the integration of the internet into mobile devices formed a strong combination that facilitated and supported various financial advancements.
Then, we see the emergence of faster payment systems across various regions, followed by cross-border connectivity, which I believe is still in the process of development. However, it has already been proven beyond the pilot stage that two countries can link their electronic payment systems and make this possible. This has brought significant economic advantages, as we have already witnessed increased productivity, reduced inefficiencies, higher efficiency, and lower risks. It has also democratized access, allowing small and medium enterprises and individuals to operate across national borders without needing to travel or establish a physical presence, enabling them to conduct business effectively.
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