Ecosystm and Bitstamp, conducted an invitation-only Executive ThinkTank at the Point Zero Forum in Zurich. A select group of regulators and senior leaders from financial institutions from across the globe came together to share their insights and experiences on Decentralised Finance (DeFi), innovations in the industry, and the outlook for the future.
Here are the 5 key takeaways from the ThinkTank.
- Regulators: Perception vs. Reality. Regulators are generally perceived as having a bias against innovations in the Financial Services industry. In reality, they want to encourage innovation, and the industry players welcome these regulations as guardrails against unscrupulous practices.
- Institutional Players’ Interest in DeFi. Many institutional players are interested in DeFi to enable the smooth running of processes and products and to reduce costs. It is being evaluated in areas such as lending, borrowing, and insurance.
- Evolving Traditional Regulations. In a DeFi world, participants and actors are connected by technology. Hence, setting the framework and imposing good practices when building projects will be critical. Regulations need to find the right balance between flexibility and rigidity.
- The Importance of a Digital Asset Listing Framework. There has been a long debate on who should be the gatekeeper of digital asset listings. From a regulator’s perspective, the liability of projects needs to shift from the consumer to the project and the gatekeeper.
- A Simplified Disclosure Document. Major players are willing to work with regulators to develop a simple disclosure document that describes the project for end-users or investors.
Read below to find out more.
Download Pathways for Aligning Innovation and Regulation in a DeFi World as a PDF
Innovation and collaboration are the cornerstones of FinTech success stories. Successful FinTechs have identified market gaps and designed innovative solutions to address these gaps. They have also built an ecosystem of partners – such as other FinTechs, large corporates and financial services organisations – to deliver better customer experiences, create process efficiencies and make compliance easier.
As FinTechs have become mainstream over the years the innovations and the collaborations continue to make technology and business headlines.
Here are some recent trends:
- The Growth of Cross-border Finance. Globalisation and the rise of eCommerce have created a truly global marketplace – and financial agencies such as the MAS and those in the EU are responding to the need.
- Transparency through Smart Contracts. As businesses and platforms scale applications and capabilities through global partnerships, there is a need for trusted, transparent transactions. Symbiont‘s partnership with Swift and BNB Chain‘s tie-up with Google Cloud are some recent examples.
- Evolution of Digital Payments. Digital payments have come a long way from the early days of online banking services and is now set to move beyond digital wallets such as the Open Finance Association and EU initiatives to interlink domestic CBDCs.
- Banks Continue to Innovate. They are responding to market demands and focus on providing their customers with easy, secure, and enhanced experiences. NAB is working on digital identity to reduce fraud, while Standard Chartered Bank is collaborating with Bukalapak to introduce new digital services.
- The Emergence of Embedded Finance. In the future, we will see more instances of embedded financial services within consumer products and services that allows seamless financial transactions throughout customer journeys. LG Electronics‘ new NFT offering is a clear instance.
Read below to find out more.
Download The Future of Finance: FinTech Innovations & Collaborations as a PDF
It’s been a while since I lived in Zurich. It was about this time of year when I first visited the city that I instantly fell in love with. Beautiful blue skies and if you’re lucky enough, you can see the snow-capped mountains from Lake Zurich. It’s hard not to be instantly drawn to this small city of approximately 1.4 million people, which punches well above its weight class. One out of every eleven jobs in Switzerland is in Zurich. The financial sector generates around a quarter of the city’s economic output and provides approximately 59,000 full time equivalent jobs – accounting for 16% of all employment in the city.
Between 21-23 June, Zurich will also be home to the Point Zero Forum – an exclusive invite-only, in-person gathering of select global leaders, founders and investors with the purpose of developing new ideas on emerging concepts such as decentralised finance (DeFi), Web 3.0, embedded finance and sustainable finance; driving investment activity; and bringing together public and private sector leaders to brainstorm on regulatory requirements.
The Future of DeFi
Zug is a little canton outside of Zurich and is famously known as “Crypto Valley”. When I lived in Zurich, Zug was the home of many of the country’s leading hedge funds as Zug’s low tax, business friendly environment and fantastic quality of life attracted many of the world’s leading fund managers and companies. Today the same can be said about crypto companies setting up shop in Zug. And crypto ecosystems are expanding exponentially.
However, with the increase in the global adoption of cryptocurrency, what role will the regulators play in aligning regulation without stifling innovation? How can Crypto Valley and Singapore play a role in defining the role regulation will play in a DeFi world?
DeFi is moving fast and we are seeing an explosion of new ideas and positive outcomes. So, what can we expect from all of this? Well, that is what I will discuss with a group of regulators and industry players in a round table discussion on How an Adaptive and Centralised Regulatory Approach can Shape a Protected Future of Finance at the Point Zero Forum. We will explore the role of regulators in a fast-moving industry that has recently seen some horror stories and how industry participants are willing to work with regulators to meet in the middle to build an exciting and sometimes unpredictable future. How do we regulate something in the future? I am personally looking forward to the knowledge sharing.
For the industry to strive and innovate, we need both regulators and industry players to work together and agree to a working framework that helps deliver innovation and growth by creating new technology and jobs. But we also need to keep an eye out on the increasing number of scams in the industry. It is true to say that we have seen our fair share of them in recent months. The total collapse of TerraUSD and Luna and the collapse of the wider crypto market that saw an estimated loss of USD 500 billion has really spooked global markets.
So is cryptocurrency here for good and will it be widely adopted globally? How will regulators see the recent collapse of Luna and view regulations moving forward? We have reached an interesting point with cryptocurrencies and digital assets in general. Is it time to reflect on the current market or should we push forward and try to find a workable middle ground?
Let’s find out. Watch this space for my follow-up post after the Point Zero Forum event!
Recognising FinTechs that are changing lives, creating impact, demonstrating innovation, and building ecosystems to shape the Digital Future.
Global Platform. Organisations that provide a platform to bring together industry stakeholders such as financial services institutions and FinTechs to drive ease of collaboration and innovation by accelerating proof of concept deployments
Financial Inclusion Impact. Organisations that promote financial inclusion in the unbanked and the underbanked with a focus on bridging the economic divide
Sustainable Finance Impact. Organisations that promote sustainable finance and have ESG values
Global Banking. Banks and financial services organisations that embrace digital technology for excellence in customer experience, process efficiency and/or compliance
Global Payments. Innovative use of technology and business models in payment areas
Global Lending. Innovation in alternative finance in areas such as microfinance for individuals and small & medium enterprises, P2P lending and crowdfunding
Customer Experience. Organisations that are driving an exceptional experience for their customers and setting new benchmarks within the industry
Global InsureTech. Excellence and innovation in InsureTech in areas such as micro-insurance, usage-based pricing, process optimisation and underwriting efficiency
To find out about the winners, read on.
To download Ecosystm Red: Global Digital Futures Awards for FinTech Awards Winners as a PDF, please click here.
When the FinTech revolution started, traditional banking felt the heat of competition from the ‘new kid on the block’. FinTechs promised (and often delivered) fast turnarounds and personalised services. Banks were forced to look at their operations through the lens of customer experience, constantly re-evaluating risk exposures to compete with FinTechs.
But traditional banks are giving their ‘neo-competitors’ a run for their money. Many have transformed their core banking for operational efficiency. They have also taken lessons from FinTechs and are actively working on their customer engagements. This Ecosystm Snapshot looks at how banks (such as Standard Chartered Bank, ANZ Bank, Westpac, Commonwealth Bank of Australia, Timo, and Welcome Bank) are investing in tech-led transformation and the ways tech vendors (such as IBM, Temenos, Mambu, TCS and Wipro) are empowering them.
To download this Ecosystm Bytes as a pdf for easier sharing and to access the hyperlinks, please click here.
Our financial system plays a central role in crystallising priorities and incentives for businesses and other stakeholders across the globe. So, many of us breathed a sigh of relief as the financial community got behind the Environmental, Social and Governance (ESG) movement in recent years, signalling a very visible acceleration in ESG as a hot button issue for investors and lenders.
Unfortunately, the growth of ESG as a priority for investors, lenders and consumers has driven many companies to oversell their green and/or social credentials in order to burnish their brands and attract investment. This is referred to as “greenwashing” and “social washing”.
As sustainability becomes a critical pillar for investors and consumers in their decision-making, data, analytics and technology play an increasingly critical role in enabling better decisions based on credible, accurate and more real-time information.
Read on to find out the three themes for technology enablement in sustainable finance, together with examples and potential use cases including companies such as IBM, Triodos Bank, Alipay, Floodmapp, and Data Gumbo.
Blockchain and Distributed Ledger Technology (DLT) is set to transform various aspects of the Financial Services industry. The technologies have a role to play in automating processes such as payments and securitisation, claims, and compliance monitoring.
Where the industry will see real value is in governance and standards around data sharing and collaboration – which lies at the core of the Open Banking revolution.
This Ecosystm Snapshot looks at how Blockchain in Financial Services is fast becoming a reality – and how different stakeholders (such as ABF, IMDA, Singapore Customs, Visa, Mastercard, TCS, Bitpanda and others) are looking to leverage it.
Innovation is at the core of FinTechs. The Financial Services industry has been disrupted over the last few years because of the innovation and customer experience that FinTechs offer. But the FinTech world has become highly competitive, and there are many companies that do not make it, despite the innovations.
There are many factors that contribute to the success of a FinTech – and creating the right market differentiation is one of the key factors. This Ecosystm Snapshot looks at how FinTechs – such Earnest, Flock, Billd, Littlepay, Willa and AffiniPay – are disrupting industries as they build solutions targeted at those specific industries, to create the market differentiation required to succeed.
The appetite to adopt Open Banking solutions has increased, largely expedited by the pandemic. As consumers look for more digital engagements and better rates and services, they are more open to giving third-party providers access to their financial information that has traditionally been held by their banks.
The success of Open Banking initiatives depends on the Banking and FinTech ecosystem coming together to create an end-to-end digital architecture.
This Ecosystm Snapshot discusses some of the evolving trends in Open Banking, such as product differentiation by FinTechs to address a competitive market; the banking industry’s need to adopt digital and foster innovation; market entry by other industry leaders; and the need for trust in Open Banking adoption.
We cover recent announcements by companies such as Lloyd’s Bank, Mastercard, Batelco Financial Services, CarFinance 247, Credit Kudos, Prometeo, APImetrics and tomato pay.