European and Asian fintech communities, regulators and “three-click” transfers

02.05.2024 | 15:17 Home / News / Fintech /
“Collaborative Fintech Community: Building on the Middle Corridor Momentum” seminar was held within the framework of the annual meeting of the Asian Development Bank (ADB) Board of Governors that commenced in Tbilisi May 2.

Natia Turnava, Acting Governor of the National Bank of Georgia, Sopnendu Mohanty, Chief Fintech officer at Monetary Authority of Singapore, Chang Yong Rhee, the Governor of the Bank of South Korea, Simonas Krepšta, Board Member at the Bank of Lithuania, and Tamaz Georgadze, CEO of the Raisin Company, participated in the discussion.

Three components

Sopnendu Mohanty, Chief Fintech officer at Monetary Authority of Singapore, noted that as a result of the coronavirus pandemic, 3 components gained key importance.

1. The introduction of national digital IDs
2. Creation of interoperable payment systems
3. Analyzing data about individuals and businesses.

According to him, these components open up significant opportunities for fintech companies. Specifically, Sopnendu Mohanty highlighted that today money transfers from Singapore to Thailand can be done with “three clicks” using a mobile phone, requiring only the recipient’s phone number for the transaction.



Chang Yong Rhee, the Governor of the Bank of South Korea, noted that the COVID-19 pandemic accelerated the development of the fintech sector and the introduction of open banking. Speaking about the challenges faced by regulators, he singled out the problem of harmonizing regulations of banking and non-banking institutions.

Regulation as a catalyst for innovation

Simonas Krepšta, Board Member at the Bank of Lithuania, half-jokingly-half-seriously said that “the European Union is famous for its regulatory requirements.” However, he noted that “often regulation serves as the catalyst for innovation.” Krepšta, in particular, noted that today European regulators are currently driving private banks to adopt instant payment technologies. He said that five years ago the Bank of Lithuania and all private banks in the country signed a memorandum on the introduction of instant payments, as a result, today 65 percent of payments in Lithuania are instant.

Speaking about the benefits of the single market, Simonas Krepšta noted that obtaining a license in Lithuania enables a financial company to provide services throughout the European Union, where 400 million people live.

“Banks are allies of fintech companies”

Natia Turnava, Acting Governor of the National Bank of Georgia, said that fintech development in the country is regarded as a component of the general economic development strategy. “Only 3.7 million people live in Georgia, and our domestic market is too small to ensure development. Hence, we are positioning ourselves as a regional hub for international trade and it is logical to develop the financial and cross-border payment systems along with it,” said Turnava.

“Our approach is that banks are allies of fintech companies, rather than competitors,” said the head of the National Bank of Georgia. She noted that the solutions developed by Georgian fintech firms are also used beyond the borders of the country, in particular, in Armenia and Uzbekistan. Natia Turnava also spoke about the cooperation with the payment systems of Turkey and Azerbaijan. She said that work is underway to introduce a unified payment system with QR codes.

F



Natia Turnava said that the National Bank of Georgia offers fintech companies a wide and flexible selection of licenses. She noted that a system has been established within the National Bank’s infrastructure, enabling fintech companies to securely test their APIs.

Tamaz Georgadze, CEO of the Raisin Company, noted that sometimes the cause of problems is that the regulatory bodies have “competing” priorities, such as ensuring financial stability, promoting competition between market participants, protecting clients’ interests. “As a result, sometimes it turns out that it is impossible to make everyone happy,” noted Georgadze.

The existing financial architecture is no longer sufficient

At the end of the discussion, Sopnendu Mohanty, Chief Fintech officer at Monetary Authority of Singapore, noted that the existing financial architecture no longer meets today’s requirements. “For example, it is forecasted that in the near future, 95 percent of financial mobile applications will store data in cloud systems. However, at present, there are only a few regulators worldwide that have developed regulations for cloud solutions,” he elaborated.

Ara Tadevosyan (Tbilisi)

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