Financial technology in the post-epidemic era

Si Gyeongmin

Sep 19, 2021

The direct impact of COVID-19 is changing the way we work. We experience global collaboration through the platform. The COVID-19 pandemic has also accelerated digital innovation. Consumers in many countries have increased their use of contactless payments, and e-commerce activities have surged as physical stores temporarily closed. But at the same time, the epidemic has also highlighted shortcomings in areas such as digital payments. One thing is clear, in the field of digital payment, international cooperation is of utmost importance. Consolidating technological capabilities through international cooperation, ensuring the operability of cross-border payments, and supporting financial inclusion are formulated by the FSB and the Committee on Payments and Market Infrastructures (CPMI) to strengthen cross-border payments At the core of the plan, the plan was approved by the finance ministers and central bank governors of the Group of Twenty in October, and was actively supported by the Bank for International Settlements.

In the past few years, some large technology companies have entered the credit market in cooperation with financial institutions. The popularization of digital payments during the COVID-19 period has allowed companies to accumulate consumer data and strengthen credit analysis, which may promote the growth of digital loans. This trend in turn raises complex trade-offs for financial stability, competition, and data protection. To find the key to these issues, design reasonable regulatory measures, and continue to fulfill their mission in a rapidly changing environment, central banks need to be at the forefront of technology. The Bank for International Settlements has established an innovation center to take the lead in promoting the central bank's research on digital innovation. Innovation centers have research centers in Europe, America, and Asia, which reflect the global nature of innovation and technology. The mission of the center is to promote cooperation between central banks of various countries and promote cooperation between central banks and academia, financial service providers, and other private institutions.

Research on financial technology will focus on six key themes: (1) supporting technology and regulatory technology; (2) next-generation financial market infrastructure (including capital market projects, basic digital infrastructure, asset tokenization, cross-border payments, and payments infrastructure); (3) central bank digital currency; (4) open finance (including application programming interfaces and related data issues in the open banking environment); (5) network security; (6) green finance. The Bank for International Settlements is planning to form a project team. In the process, they will help central banks navigate technological changes and play the role of catalysts, operators, and regulators in the ever-changing technological environment to ensure the security of global financial markets.

Finding solutions to complex problems is crucial for the central bank and all financial sectors. The dual goals of creating a capital market alliance and advancing the digital agenda have resonated strongly in Europe: multilateral cooperation and proactive measures are essential for establishing a future-oriented financial architecture that can withstand large-scale shocks. In the process of building a new financial order, it is necessary to adapt to the new financial structure and technological innovation. These two goals are strategically complementary to improving the resilience and operational efficiency of the European economy.

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