Mainstreaming Fintech at the 2020 IFF Fintech Summit

The Paulson Institute co-hosted the second Global Fintech Summit to explore the latest trends on mainstream applications of fintech.

To explore the latest trends on mainstream applications of fintech, the Paulson Institute and the  International Finance Forum (IFF)  jointly co-hosted the second Global Fintech Summit. Held during IFF’s Global Annual Meeting in November 2020 in Guangzhou, China, top-tier experts from the United Nations and business leaders from the United States, China, and the Middle East participated virtually and in person.

Not only an essential topic for the IFF Global Annual Meeting broadly, but fintech is also high on national agendas globally, especially as the COVID-19 pandemic and its economic toll weigh heavily on governments.

The Summit approached the subject from two perspectives: financial institutions and fintech companies. There was a dynamic dialogue about the global practices emerging around fintech application and ideas on improving fintech regulation, mainstreaming trends of fintech development, and its opportunities and challenges.  Deborah Lehr , IFF board member, Vice Chairman and Executive Director of the Paulson Institute, and  Gracie Sun,  Senior Advisor of the Paulson Institute and Managing Director of the Green Finance Center, co-chaired the Summit.

Deborah Lehr, IFF board member, Vice Chairman and Executive Director of the Paulson Institute, shared how the pandemic has impacted fintech.

Not only an essential topic for the IFF Global Annual Meeting broadly, but fintech is also high on national agendas globally, especially as the COVID-19 pandemic and its economic toll weigh heavily on governments. To begin the discussions, Lehr shared how the pandemic has impacted fintech, including through accelerating the adoption and growth of fintech by traditional financial institutions, building the popularity of fintech leading to robust demand and increased regulatory scrutiny, and presenting an opportunity for fintech to be a critical player in a post-pandemic green recovery. 

The panel of experts provided wide-ranging and thought-provoking insights across the two Summit panels. The main highlights are below. 

Opportunities abound, but challenges are plentiful

The presence of fintech and digitalization is already a part of the global financial system. Take as examples the spread of sandboxes bringing financial institutions and fintech companies together to explore collaboration as well as the explosive e-commerce and payments growth for the large unbanked population in the Middle East and North Africa region, which is experiencing a significant  digital transformation . And the various catalytic actions outlined in a  UN report , like digitally enabling small and medium sized enterprise financing or accelerating the use of domestic savings for development finance, outline even more opportunities for fintech. Despite this great potential, the barriers and challenges must also be recognized and addressed to effectively leverage fintech. Globally, there is a growing consensus that fintech requires appropriate regulatory structures featuring good governance policies that tackle concerns such as cyber risks.

Creating an effective regulatory framework to support fintech innovation and digital transformation while addressing the inherent financial and governance risks is imperative.

Balancing fintech industry development and regulatory oversight 

China's financial regulators regard fintech as a key element of the country’s financial infrastructure, and believe that fintech will play a critical role in China's 14th Five-Year Plan including in improving the financial system’s efficiency and for financial inclusion. In recent years, the People's Bank of China (PBOC) established a committee to study fintech, issued a plan for fintech development, and launched seven pilot fintech regulatory sandboxes. This goes hand in hand with data becoming a key factor of production, meaning digital transformation will be a long-term and central focus for China's financial industry. As such, creating an effective regulatory framework to support fintech innovation and digital transformation while addressing the inherent financial and governance risks is imperative.

Fintech innovation and mainstreaming in China

Gracie Sun, Senior Advisor of the Paulson Institute and Managing Director of the Green Finance Center, concluded the Summit with insights from developments in China.

Fintech is already being widely and innovatively applied in China. For example, in helping with China’s post-pandemic green recovery, supporting its national green finance system, promoting environmental, social and governance (ESG) investment, assisting climate-related risk assessment, and aiding companies’ shift towards low-carbon development and digital transformation, fintech is gradually being mainstreamed. It is also expected to continue to play an increasingly important role in global issues like tackling climate change and achieving carbon neutrality goals. 

Sun concluded the Summit with insights from developments in China. The rapid growth of fintech in the country continues to facilitate green finance development and digitalization of industry particularly for small and medium sized enterprises. However, striking a balance between innovation and regulation is key to best encourage continued fintech development.

Full video of the Global Fintech Summit can be viewed  here 

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Deborah Lehr, IFF board member, Vice Chairman and Executive Director of the Paulson Institute, shared how the pandemic has impacted fintech.

Gracie Sun, Senior Advisor of the Paulson Institute and Managing Director of the Green Finance Center, concluded the Summit with insights from developments in China.