Report of a roundtable discussion which took place during the Japan FinTech Festival 2024
3 June 2024 - This report draws insights from the ‘Rearchitecting the Global Financial System’ roundtable at the Japan FinTech Festival 2024, exploring the global financial system’s modernisation and technological needs. The discussion generated actionable insights for the industry, addressing four central themes including:
Part 1: Global realities and challenges
The existing financial system, established post-World War II, faces significant challenges in addressing the needs of a diverse global population, including 1.5 billion unbanked individuals and SMEs struggling for financing. The inefficiency of outdated systems, high remittance fees, and sustainability concerns call for an urgent, strategic overhaul incorporating modern technologies and sustainable practices.
Part 2: The need for rearchitecting the financial system
The financial system reform roundtable brought together experts to explore global financial changes, motivated by innovations like India’s Aadhaar and Kenya’s M-PESA. Participants agreed on modernising financial structures to address inefficiencies and embrace technologies like blockchain, despite concerns about reform pace and integrating old systems. The discussions emphasised leveraging public digital
infrastructures, adopting forward-thinking regulatory policies, and fostering partnerships to improve the accessibility and efficiency of financial services.
Part 3: Understanding digital infrastructure
This theme underlined the critical role of digital infrastructure in driving economic competitiveness, emphasising the need to integrate digital and financial systems for national and global benefits. It addressed the pressures on countries to meet international standards and the difficulties of aligning local and global systems, including blockchain payments. The discussion also stressed the importance of cyber connectivity,digital identity, interoperable payments, and data exchange in achieving worldwide compliance and growth. Furthermore, the rise of tech’s involvement points to a move towards innovative, payment solutions globally.
Part 4: Success stories and recommendations to foster digital transformation in finance
The transformation in finance is underpinned by initiatives from both the public and private sectors, including regulatory bodies and FinTech companies like Ripple. Successes such as India’s UPI system illustrate the potential of digital payments, underlining the importance of leadership, strategic funding, and regulatory support. Accelerating digital infrastructure adoption demands public-private collaboration, regulatory reform, and a focus on consumer engagement through education and talent redistribution towards digital frontiers.
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