Finance Secretary Carlos G. Dominguez III has called for a serious rethinking of development banking strategies amid the challenge of making economies more inclusive in today’s world of ever-changing and disruptive digital technologies.
According to Dominguez, fintech or financial technology is one “dynamic area” that development banking policymakers should look into as new digital tools like e-payment systems speed up business transactions and make possible a more inclusive financial system.
Unless new disruptive technologies are harnessed to make institutions stronger, Dominguez said “they will overrun the way we govern our communities.”
He said new digital technologies, complemented by open borders, free trade and increased connectivity will change the way wealth is produced, shared and used.
But rather than fear the emerging digital chaos, governments should aspire to make technology-driven economies more inclusive, he said.
“We are at the dawn of a utopia driven by digital technologies. Autonomous vehicles, 3D printing and personalized medicine demand we alter the way we do things,” said Dominguez in his closing remarks read for him by Finance Undersecretary Antonette Tionko.
“Obsolete businesses die like dinosaurs, except at an even faster pace. New businesses will have to be imagined by the day,” he added at the ‘Technology for Inclusion’ Conference held at the Asian Development Bank (ADB) headquarters.
“Welcome to this brave new world. In it we must rethink the way we do things, including what development banking should be doing,” Dominguez said.
The half-day conference held last Friday brought together leading policymakers, business leaders, and academics to discuss how new technologies, especially digital technologies, can be tapped to ensure more inclusive growth.
The forum serves as a lead-up event to the 51st Annual Meeting of the ADB Board of Governors hosted by the Philippines this week.
Dominguez said the discussions held at the conference make up only the beginning of more dialogues that should be done with the acceptance that today’s institutions must be reinvented lest they perish in this era of rapidly evolving technologies.
“The pace of technology-driven change will likely quicken. It alters the terms of our confederation. It instantly redefines the horizon. The challenge is to make this fast-paced technology-dictated change work to make human association better and our shared future brighter,” Dominguez said.
Dominguez noted that advances over the last 30 years in healthcare, education, communications and productivity that were principally driven by the digital revolution helped improve the average life expectancy by 11 years.
“Yet this revolution has only just begun. Cloud computing, artificial intelligence and increasingly more powerful mobile technologies will alter the way we live and the way our economies are organized,” Dominguez said.
“Fintech is a particularly dynamic area. New digital tools such as e-payment systems enable us to speed up transactions and improve remittance processing. They make possible a more inclusive financial system,” Dominguez said.
According to studies, digitally driven financial inclusion using today’s fully developed technologies could increase gross domestic product (GDP) growth by 3 percent and raise income levels by 11 percent for the poorest, he noted.