ARCHIVED LBLF
Ep 1 – Finance, Technology and Regulation in 2021
In this episode of Looking Back Looking Forward – the first of 2021 and the first of our second series – looking forward, Professor Douglas Arner talks about the key themes for FinTech, RegTech and digital finance in 2021. Looking back, Professor Arner highlights how 2020 marked the key trends for digital finance over the next decade: technology, sustainability, and an ongoing tension between globalisation and fragmentation. Looking at these in 2021, the focus will be on Digital Finance Platforms such as Ant, on normalisation of cryptocurrencies and digital assets, on building better infrastructure including RegTech/SupTech and central bank digital currencies, and on the role of data and cybersecurity.
For more information on the University of Hong Kong’s financial technology programme and all the episodes of Looking Back Looking Forward, visit http://www.hkufintech.com and discover the transformation of information technology’s ever-growing impact on finance.
Ep 2 – Crypto Normalisation
In the first episode of Series 2 of Looking Back Looking Forward, Professor Douglas Arner looked at the big picture trends for finance, technology and regulation in 2021. In this Episode 2, he focuses in on one of these: how cryptocurrencies and digital assets are increasingly becoming a new asset class in the traditional financial system, subject to a wide range of regulation just like other aspects of finance. The episode discusses the evolution of crypto, blockchain and digital assets over the past decade, highlighting that – regardless of price volatility – both the blockchain and digital assets now have a significant place in the financial system, a place that is likely to increase with the launch of not only Diem but also an increasing range of central bank digital currencies.
Ep 3 – Building Better Financial Systems
In this episode of Looking Back Looking Forward: Building Better Payment Systems, Professor Douglas Arner discusses the progression of electronic payments, since its acceleration towards social development from the last hundred years, and recently towards the impact COVID-19 on global economies. The use of such payments co-developed throughout human history, from the telegraph to the automated teller machine (ATM) and, most notably, to the establishment of decentralised ledger technology (blockchain, bitcoin, etc.). Such innovative steps have encouraged the competition to raise the bar, such as DCEP, the world’s first major currency central-bank digital currency in response to a more decentralised payment system.
The future role of electronic payments and its significance towards the coming years are highlighted in a new paper.
Ep 4 – Crypto Normalisation
In this episode of Looking Back Looking Forward, Douglas Arner discusses the implications of COVID-19 for RegTech and SupTech: the use of technology for regulatory and supervisory purposes. Non-face-to-face interactions due to lockdowns and other COVID-19 measures have allowed the pursuance of digital reporting and analytics to not only create efficiency but also achieve regulatory and supervisory objectives for financial systems to support sustainable development more broadly. Further readings – “Digital Finance, COVID-19 and Existential Sustainability Crises: Setting the Agenda for the 2020s” and “FinTech, RegTech and the Reconceptualization of Financial Regulation“.
Ep 5 – Global Digital Finance Platforms
In this episode of Looking Back Looking Forward, Douglas Arner reflects on the evolution of financial technology, culminating in today’s FinTech 4.0. FinTech 4.0 is characterized by the rise of digital finance platforms on the basis of Big Data, network effects, and economies of scope and scale. In this latest phase, BigTechs like Apple, Facebook, Ant Financial and Tencent are recreating and reshaping finance, economies and societies. In looking at the evolution of digital finance platforms, economies of scope and scale and network effects are leading inexorably to concentration and dominance. While network effects and economies of scope and scale in finance and technology are producing tremendous benefits across the world, particularly in the context of payments, communications, analytics and access to finance, they also bring risks: after all, in a “winner takes all” world, eventually everyone else loses. Looking forward, we need to consider both the benefits as well as the risks of digital finance platforms across policy and regulatory discussions. In a collaboration with the United Nations Dialogue on Global Digital Finance Governance, we have published a series of papers looking at related issues.
Ep 6 – Digital Finance in China
In this episode of Looking Back Looking Forward: Digital Finance in China, Professor Douglas Arner highlights China’s transformation through decades of restructuring its traditional financial system aiming to support growth and development for MSME’s and non-state sectors. The assistance from the country’s big tech companies and their digital payment systems such as Alipay and WeChat Pay have also driven China’s development of digital financial services. Professor Arner also discusses China’s prioritisation of its new national cybersecurity agency, focusing on national security issues alongside its financial and social matters relating to large-tech companies seeking gains outside its borders. Further reading – Regulation of Digital Financial Services in China: Last Mover Advantage.
Ep 7 – Revisiting August 1991
In this episode of Looking Back Looking Forward, Professor Douglas Arner revisits August 1991 in the global breakthrough of the World Wide Web created by Tim Berners-Lee. Thirty years of transformation since the discovery of the internet is reflected in the context of finance which began from an analog industry and redefined into a digitised industry, through the existence of email and large-platform companies growing into tech giants. Data and information processed into amalgamation by giant big-tech platform companies have triggered responses from the EU, with its personal data protection initiatives, and China, with its data infrastructure system controlling information flows. Professor Arner also discusses the questions surrounding free flows of data and potential standards which may alleviate the way in which jurisdictions themselves can oversee data information. Further reading – The Transnational Data Governance Problem by Douglas Arner, Giuliano Castellano and Eriks Selga, explains the fragmentation of transnational data governance due to political or cultural reasons, including why data is approached differently in major jurisdictions with competitive systems for access to such markets.
Ep 8 – Crypto Normalisation 2.0
In this episode of Looking Back Looking Forward, Professor Douglas Arner discusses how regulatory and FinTech issues have diverged, particularly in the case of crypto normalisation: cryptocurrencies and digital assets integrated into the regulated financial system. Rather, regulators in the US, UK and, most recently in China, have issued warnings about crypto and digital asset exchanges operating in their respective systems. Bitcoin’s headway, which prompted rising competitors such as Dogecoin and other crypto assets to emerge, had created concern for regulators to protect consumers and prevent potential market collapse. Professor Arner also describes China’s push to drive cryptocurrencies out of the Chinese financial system, in preparation for the country’s Central Bank Digital Currency scheduled for next year, causing financial systems around the world to re-evaluate their regulatory policies.
Ep 9 – Climate Change
This month’s episode of ‘Looking Back Looking Forward’ revisits the big issues on finance in the last decade revolving around technology, sustainability, globalisation and fragmentation to respond to the COVID-19 pandemic. Finance’s ability to combat climate change by 2030 has been laid out by global initiatives, but can this be achieved in time? With the rising concern for carbon emissions, methane use and increasing energy consumption, Professor Arner also discusses methods to redeploy financial resources in support for climate solutions, including recommendations for a carbon tax and additional investments for sustainable development.
Ep 10 – UN Global Dialogue on Digital Finance
This episode of Looking Back Looking Forward discusses the transition from FinTech 3.0, the application of new technologies from FinTech and RegTech startups, to FinTech 4.0, the emergence of large digital finance platforms and their roles in the coming years. In collaboration with the United Nations, Professor Arner and his team focus on startups and limited competitors transforming into big firms, termed as ‘BigFintechs’. The formation of such new entrants leaves some questions: How can we maximise BigFintech’s benefits of digitisation for societies? How can we make the most out of its data? How can BigFintechs support wider sustainable development goals? ‘A Principles-based Approach to the Governance of BigFintechs’, a newly released paper as part of the United Nations Development Programme (UNDP) and United Nations Capital Development Fund (UNCDF)’s study, highlights the principles relating to financial regulation, corporate governance, competition policy, sustainability and responsibility in which BigFintechs can target for sustainable development.
Ep 11 – Digital Finance in 2021
In this final episode for Looking Back Looking Forward’s series 2, Professor Douglas Arner highlights the significant impacts and developments in finance and technology across 2021. Has the concentration of BigTech, from China’s Ant and the US’s Google and Facebook, created competition in Data access and information between these companies? Where will policymakers stand in the growth of central bank digital currencies? Can COP26’s initiatives pull their weight in sustainability development? What will be the regulatory response towards cryptocurrencies and digital assets in its fight to enter into the regulator financial system? These questions and more are discussed to prepare for 2022’s financial headway.