Four projections at the intersection of Policy, Tech and Finance in 2024
In February alone, we’ve seen Nikkei's historic climb to heights reminiscent of 1989 1 , the soaring $2 trillion valuation of AI chip giant NVIDIA 2 and Open AI’s world-simulator Sora 3 that sent shockwaves through tech and media worlds, and India’s tech sector under the spotlight with the near-collapse of Paytm and Byju 4. These recent headlines serve as poignant markers of the dynamic landscape we inhabit.
Against this backdrop of highs and lows, we take stock of the research from our partners and fresh insights generated from the Elevandi Insights in November 2023 to make sense of four areas where we see bright spots and opportunities in the year ahead; as well as enduring trends that are poised to withstand existing headwinds.
Tokenisation will transition from theoretical concepts to real-world implementation
Industry pilots have successfully demonstrated test cases for tokenised financial assets, marking a crucial turning point where attention shifts towards building essential capabilities to expand tokenised markets. This achievement signals a significant milestone in the adoption of blockchain technology within the financial sector. As organisations increasingly recognise the potential benefits of tokenisation, efforts are intensifying to bolster infrastructure, regulatory frameworks, and market mechanisms essential for scaling tokenised assets across various sectors. This transition represents not only a technological advancement but also a paradigm shift in the way traditional financial assets are issued, traded, and managed in the digital age.
Project Guardian roundtable which is a significant collaborative effort launched in May 2022 by the Monetary Authority of Singapore (MAS). As part of the initiative, 17 leading global financial institutions including Standard Chartered have carried out successful pilots across areas like wealth management, foreign exchange, fixed income and trade finance to explore the economic potential and value-adding use cases of asset tokenisation
Stakeholders of Project Guardian delineated the necessary steps to transition from conceptualisation to commercialisation in this Standard Chartered report Guardian roundtable: Concepts to Commercialisation
Cross-border payments connectivity will reach a global scale
Bill and Melinda Gates Foundation ASEAN cross-border payments roundtable
Connecting instant payment systems
Since the G20's ratification of the Roadmap for Enhancing Cross-border Payments in 2020, there has been a surge in global attention towards advancing cross-border payment systems. Notably, within the ASEAN region, significant strides have been made through Project Nexus, led by the Bank of International Settlements (BIS) Innovation Hub. This initiative seeks to forge a multilateral network interconnecting domestic instant payment systems. Delve into the most recent publication from the BIS Innovation Hub in Enabling & Scaling Instant Cross-Border Payments.
Moreover, the efforts of global non-profit organisations like the Bill and Melinda Gates Foundation, are pivotal to bolster financial inclusion across the ASEAN region. Their initiatives focus on bridging fast payment systems and fostering collaboration between countries in the global south. For further insights into these endeavours, delve into the discourse on Advancing Cross-Border Payments in ASEAN and Beyond.
Reducing complexity in cross-border transaction compliance
Beyond individual transactions, the BIS Innovation Hub's Project Mandala seeks to harmonise policy and regulatory frameworks to facilitate efficient cross-border payments. Discover more about this endeavour in Shaping the Future of Cross-Border Transaction Compliance
Artificial Intelligence (AI) is a double-edged sword; the industry needs to strike a balance between maximising its potential and mitigating its risks.
AI-driven net zero: A case based approach for decarbonisation and climiate risk mitigation roundtable
Yuval Noah Harari's cautionary statement “AI is an alien species that could trigger humanity’s extinction” is just one of many on the apprehensions surrounding the advancement of AI. These voices, including CEOs at a Yale CEO Summit 5, former researchers from OpenAI 6, and esteemed figures like Geoffrey Hinton 7 often regarded as the "godfather" of AI, underscore the potential risks posed by AI and the urgent need for responsible development and governance.
In response to the challenges posed by generative AI, particularly in the realm of consumer protection, efforts are underway to address its implications. The report by the Alliance for Innovative Regulation—Generative AI: The Future of Consumer Financial Protection examines the intersection of AI and consumer rights, aiming to establish frameworks that mitigate risks and safeguard consumer interests in the evolving digital landscape. By proactively addressing these concerns, stakeholders aim to foster a regulatory environment that promotes innovation while ensuring ethical AI deployment.
AI's transformative potential extends beyond consumer protection to encompass broader societal goals, including decarbonisation efforts. Through innovative applications and strategic integration, AI can serve as a catalyst for driving sustainable practices and accelerating progress towards net-zero objectives. The report by PwC on AI-driven Net Zero illustrates how the intersection of AI and decarbonisation presents opportunities to optimise resource utilisation, enhance predictive capabilities, and facilitate data-driven decision-making, ultimately contributing to a more sustainable future.
Technological action is necessary to achieve net zero transition
The outcome of COP28 highlights the imperative for all nations to formulate their adaptation plans by 2030. Concrete measures are crucial as we navigate the climate transition, particularly focusing on technological initiatives embraced by policymakers, regulators, and industries to facilitate the commercialisation of sustainable solutions.
Central to these efforts is the recognition of data's pivotal role. Recent discussions emphasise the need to forge synergies and establish a collaborative data ecosystem, crucial for the financial sector to effectively respond to environmental uncertainties. KPMG's publication, Bolstering the Financial Sector's Resilience to Environmental Risks, synthesises insights from global regulators and financial experts, stressing the importance of integrating sustainability reporting and data collection into business strategies.
Furthermore, organisations are under mounting pressure to incorporate sustainability reporting and data collection into their operational frameworks. Against this backdrop, there's a growing necessity to comprehend the challenges faced by smaller companies in navigating these complexities. KPMG’s report on Project Savannah: Maximising the Potential of Digital ESG Credentials for MSMEs sheds light on the struggles of MSMEs in digitalisation and ESG reporting, prompting a renewed commitment from industry players to streamline sustainability reporting processes to help MSMEs in their sustainability journey.
Before you go, check out these recent publications:
You've just read insights generated from the November 2023 Elevandi Insights in Singapore, comprising 13 new reports published by eight public-private organisations (Big thanks to our co-publishers Alliance for Innovative Regulation, Bill and Melinda Gates Foundation, BIS Innovation Hub, IDB Labs, KPMG, PwC, Ripple and Standard Chartered.) covering tokenisation, DeFi, cross-border payments, AI and ESG. More insights will be published at the end of March; sign up here to receive updates.
Cockails and connections at the Global Hive
The genesis of these insights
Elevandi Insights comprise of deep-dive roundtables designed for open and in-depth public-private sector leadership dialogues, which observe Chatham House rules. Steered by a regulator or policymaker, each roundtable is purposefully tailored to drive actionable outcomes from whitepapers, to the initiation of a working group, or the declaration of a new commitment.
You can join us at the next series of public-private roundtables across the year: