Virtual Banking and Beyond

Virtual Banking and Beyond

27 September 2023

The integration of technology, finance and services is rapidly changing the banking landscape, as big techs, fintech firms, non-bank financial institutions as well as incumbent banks take up stakes in virtual banking. New technology-driven models exploit the expanding data footprints of individuals and firms to generate information capital and reduce the reliance on collateral when offering loans and other financial services. Drawing on experiences from existing virtual banks, the speaker demonstrates that data and entities that manage data will be at the heart of this transformation from physical collateral to information collateral, helping to drive financial inclusion. At the same time, the growing importance of information capital presents new challenges to data privacy and its regulation. Financial regulators thus need to ensure that regulatory oversight delivers on the inclusion and intermediation-enhancing benefits of digital finance without compromising traditional regulatory goals. Moreover, there is a pressing need for a system of data governance that allows consumers and businesses to exercise control over their data through the granting and withholding of consent to the use and transfer of their data. The speaker delves into the case of India’s digital public infrastructure (DPI) and Hong Kong’s virtual banking experience to offer examples of a data governance framework and an integrated regulatory framework respectively. The BIS papers number 120 “Virtual banking and beyond” is available here.  In addition to Sally, the authors of the paper also include Derryl D’Silva, Head of Resource Management at the BIS Representative Office for Asia and the Pacific, Frank Packer, adviser to the Chief Representative of the BIS Asian Office, and Siddharth Tiwari, former Chief Representative of BIS for Asia and the Pacific.

About the Speaker:
Sally Chen is currently the Regional Adviser for the Monetary and Economic Department in the Bank for International Settlements (BIS) Asian Office. Before joining BIS, Sally was with the International Monetary Fund (IMF) in various capacities, including assignment in the Fund’s strategy department where she helped draft the Fund’s policy stance on exchange rate policy and debt management. More recently, Sally was the Resident Representative heading the IMF’s Hong Kong Office, where she coordinated the Fund’s research efforts on financial market developments and outreach in the Greater China region.

Chair: Dr Emily Lee, Director, Asian Institute of International Financial Law, Faculty of Law, HKU

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