Economy, Business And Markets

Banking Future, Fintechs Take Center Stage

Finance Desk
Banking Future, Fintechs Take Center Stage
Banking Future, Fintechs Take Center Stage

The second and final day of the biggest electronic banking event in Iran featured several international keynote speakers, included several side events and workshops, on Tuesday.

While the opening day of the Seventh Conference on Electronic Banking and Payment Systems organized by the Monetary and Banking Research Institute was attended by several high-level officials, the second day kicked off by a speech by Jenna Huey Ching of Malaysia on fintechs and banking regulations.

She is a fintech ecosystem and landscape developer with the Malaysia Digital Economy Corporation—a government-owned agency launched in 1996 to pioneer the transformation of Malaysia’s digital economy.

Since the organization leverages Islamic finance in its fintech hub, Ching also referred to Iran and Malaysia as important players in the field of Islamic banking, which are both developing economies as well.

The Malaysian expert spoke of the potentials of fintechs in assisting people, especially those in rural areas, ways of improving banking and how regulatory bodies should familiarize themselves using a sandbox environment currently employed by her country.

Up next was Brett King, the Australian futurist who has become an international best-selling author with works like Bank 3.0.

However, the founder of Moven, a New York-based mobile banking startup, was in Tehran to talk about Banking 4.0 or the not-too-distant future of banking which, according to him, will be done strictly virtually, sounding the death knell for physical branches by 2030.

His main advice for bankers was to follow the example of the likes of Jack Ma, the Chinese business magnate, and Elon Musk, his American counterpart, who have both employed first principles thinking methods to develop highly lucrative businesses.

First principles thinking is the practice of boiling concepts down to their fundamental tenets and working from the ground up based on them, in contrast with introducing new components and variations to the same old things and reasoning with analogy.

“In 2025, the biggest bank in the world will not be any of the big banks you know now,” King predicted, adding that it will be Ant Financial Services Group, the Alibaba-affiliate that is also currently the most valuable fintech company in the world.

According to the author of the upcoming Bank 4.0—expected to be released globally in April, the company will successfully continue its current trend of expanding mobile banking, which has already provided millions of people with banking services without ever having visited a branch, until it will have up to 3 billion customers before 2025.

 Digital Future

Paul Sommerin, Ernst & Young’s head of technology and transformation for the Middle East and North Africa region, addressed the gathering on core banking, whether it will shrink or expand and its major challenges in terms of business strategy, vendor and delivery strategy, technical design, program governance and change management.

Transforming banks into fully digital entities would be “a bridge too far” for established Iranian lenders at present, he opined, but added that moving toward digitalization is an eventuality they must pursue at their own level.

The event also hosted smaller presentations, discussions and workshops on the future outlook of the Iranian payment system, branch evolution, IFRS, social media analysis, PSD2, open banking, innovation in financial industries, regtech, Internet of Things, blockchain, FATF standards and combating fraud.  

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