PARTO, AIRA A.

BANKING AND FINANCIAL INSTITUTIONS

BSBA FM – 45491 8:30-10:00 T/TH

Activity #2
BSP-RBWC International Research Conference 2021
Session 4. Payment Innovation, Financial Inclusion, and Financial Stability Risks

PANELISTS/SPEAKERS:
Host: Vic Delloro
Speaker:
Ms. Chuchi Fonacier – Deputy Governor of Bangko Sentral ng Pilipinas
Panelists:
Mr. Madis Muller – Governor Eesti Pank (Bank of Estonia)
Mr. Mehdi Manaa – Chief Executive Officer of BUNA (Arab Regional Payment and Clearing
Settlement System)
Mr. Sopnendu Mohanty – Chief Fintech Officer of Monetary Authority of Singapore
Mr. Colin Pou – Executive Director Financial Infrastructure of Hong Kong Monetary Authority

SUMMARY:
On the second day of the BSP-RBWC International Research Conference 2021,
they have held five sessions discussing different topics which is also streamed online and
occurred via Cisco Webex. On session 4, they discussed about payment systems innovation,
financial inclusion and financial stability risks.

In starting the session, Ms. Chuchi Fonacier, deputy governor of Bangko Sentral
ng Pilipinas was introduced. Ms. Fonacier started her speech and welcomed the participants,
panelists and speakers. Then, she discussed the importance of building trust, mitigating risks and
driving inclusive economies, mots especially in this time of pandemic. After that, she introduced
the four panelists, starting with Mr. Madis Muller, Mr. Mehdi Manaa, Mr. Sopnendu Mohanty,
and Mr. Colin Pou.

Mr. Madis Muller, governor of Eesti Pank, discussed about what action is needed
to strengthen existing traditional entity-based approach and activity-based approach to
regulations and if there is room to embed proportionality approaches in regulating and
supervising financial institutions under an increasingly digital financial ecosystem. He discussed
the proportionality in EU legislation, regulation and supervision and its application of this
proportionality in practice. He also discussed how markets favor big tech over banks and how
they implemented digital services act in addressing risks when it comes to competition policy.

Before introducing the next panelist, Ms. Fonacier discussed the nine UN
principles for responsible digital payment that served as guides for the governments and different
companies in managing different payment transactions. These are; treating users fairly, ensuring
funds are protected, prioritizing women, safeguarding client data, designing for individuals,
PARTO, AIRA A. BANKING AND FINANCIAL INSTITUTIONS
BSBA FM – 45491 8:30-10:00 T/TH

being transparent particularly in pricing, providing user choice through interoperability, making
recourse clear, quick and responsive and lastly, having champion value chain accountability.

After that, Mr. Mehdi Manaa, CEO of BUNA, was introduced. He talked about
the initiatives that have been undertaken in their country to advance the 2020 payment aspects of
financial inclusion and their guidance to practice this aspect. He also shared some key lessons
that they have learned and the challenges they encountered in implementing this process as well
as the implications for regulations and policy making. He also discussed about his business
which is BUNA and its objectives. BUNA is a payment system that support regional integration
and financial inclusion wherein it aims servicing the national government and provides payment
in the national currency, making it available for everyone who would want to use it. It also offers
a solution for a cross border payment to happen and be offered in multicurrencies so it can be
used by anyone around the globe. It is seen as a regional initiative with global reach while having
high ambitions and low risk appetite. Mr. Manaa said that the lessons that they have learned is
that it is difficult to reconcile with other agencies for having different constraints and different
requirements and commitment to adhere these requirements to the different regulators at the
same time is a big challenge for BUNA.

The third panelist, Mr. Sopnendu Mohanty, Chief Fintech Officer of Monetary Authority
of Singapore, then discussed the new approaches which financial regulators should adopt to
address the challenges of the growing economic significance of these fintechs or bigtechs and the
risks that these could bring to our financial system. He said that one of these challenges is the
risks that it may bring to the poor area that can be the most affected if bigtechs began to
dominate the marketplace. Another challenge he discussed is data issues which is about datas of
consumers that might be disproportionate. The last challenge he discussed is the platform risks
which includes cyber challenges that is dangerous and might cause significant disruptions if
failed. He also talked about the mitigants that can be recommended for those fintechs and
bigtechs from becoming too big to fail. With that, he discussed four foundational infrastructures
a country needs to become a level playing field for everybody to participate. These foundation
infrastructures are trusted digital identifier, trusted data exchange, highly interoperable limited
infrastructure and lastly, strong and robust consent system. He also talked about the regulations
one needs to implement to achieve proper fintech or bigech application. These regulations are
being covered under the regulatory of its own country and focusing on liquidity and capital
expectations.

The last speaker, Mr. Colin Pou, executive director of Financial Infrastructure of
Hong Kong Monetary Authority, was introduced and then discussed specific region initiatives
have been done to allow traditional financial institutions in turn to allow interoperability of data
regimes so that they can reduce friction and facilitate the regulated flow of data across borders.
These initiatives are providing more innovative digital services, ensuring the quality of the
PARTO, AIRA A. BANKING AND FINANCIAL INSTITUTIONS
BSBA FM – 45491 8:30-10:00 T/TH

overall digitalization process in designing the technical and governance protocol for the
platform. Then, he discussed how these initiatives drive financial inclusion and how can we
ensure the ethical use of data and protect data privacy laws. He believed that this pandemic
accelerated and intensified all the demand factors that led us to digitalization.

After the discussions of the panels, Ms. Fonacier then asked them about the
strategies that they adopted in jurisdiction to unlock the potential of fintech. Mr. Muller talked
about the strategies they have used in Europe which are payment services directive, use of open
banking and retail payment strategy. Mr. Manaa discussed about strategy of coordination with
different countries, technological enhancements and delivering right user experience. Mr.
Mohanty on the other hand explained the importance of giving digital licenses to banks which is
a crucial part of helping financial sector to digitize faster and provide necessary solutions for
them. Lastly, Mr. Pou discussed the seven smart banking initiatives, having faster payment
systems, virtual banks and open API. He also talked about the strategy they implemented which
is the Fintech 2025 strategy wherein it discusses about divided talents and putting more
resources.

KEY TAKEAWAYS:
In doing business, strategies on how to start and introduce your business to the
market are a very important part before opening your business. As the speakers talked about the
different challenges and lessons they have learned, you will realize how businesses use these
lessons to improve and innovate new ways of delivering your products to your market. I also
realized that in a sudden crisis like this pandemic, businesses must learn how to adapt to
changing demands of the market. There should be enough actions to be implemented if such
phenomena happened.

Businesses are very fragile in different crisis no matter what industry you are in.
But a business that sees opportunity in every crisis is a business that will never operating. Just
like how the speakers and their businesses took the opportunity to develop, enhance and innovate
new technology to continue their operations during this pandemic. A lot of things can be learned
from this pandemic and one of that is grabbing the opportunity to create something new that
could help not only you but also your community to adapt in the changing economy.

Also, knowing what is the next step to take is a big advantage for businesses that
have plans ahead of time. Taking the best initiative measure that could help us in protecting our
enterprise is a great step so that our business keeps operating. I think, the knowledge that we
have gained from this conference like knowing the potential of fintech and bigtechs to, is already
our advantage because we can use this knowledge to search more about it, how it works and how
we can apply it in the future.
PARTO, AIRA A. BANKING AND FINANCIAL INSTITUTIONS
BSBA FM – 45491 8:30-10:00 T/TH
PARTO, AIRA A. BANKING AND FINANCIAL INSTITUTIONS
BSBA FM – 45491 8:30-10:00 T/TH

ATTENDANCE