Emerging technologies in the financial sector (“FinTech”) are driving transformational change in the provision of financial services in such areas as payments, financing, investments, financial information and advice, and asset management. These developments bring both opportunities and risks. The session will take the form of a roundtable discussion among experts on FinTech issues from the public and private sectors and academia, who will be asked to respond to a series of specific questions on how new technologies can disrupt the nature and provision of financial services and the implications that these changes may have for financial stability and regulation.
Tao Zhang, Deputy Managing Director, IMF
Tao Zhang is Deputy Managing Director of the IMF. He was Deputy Governor of the People's Bank of China (PBOC) prior to joining the Fund. Over the course of his career, he has held various senior positions at the PBOC, including as Director General of the Legal Affairs Department, Director General of the Department of Financial Survey and Statistics, and Director General of the International Department. He also served as Executive Director for China at the IMF.
Jeremy Allaire, Chief Executive Officer of Circle
Jeremy Allaire is the Founder, Chairman, and CEO of Circle, a consumer internet company focused on providing secure, simple, and less costly technology for storing and using money. He is also the Founder, Chairman and CEO of Brightcove, an online video platform used by media organizations worldwide. He has spent the past 20 years building and leading global technology companies with products used by hundreds of millions of consumers and businesses worldwide.
Jill Carlson, Head of Market Strategy, Chain
Jill Carlson is the Head of Market Strategy at Chain, a blockchain technology company based in San Francisco. Chain powers next-generation financial networks for companies including Visa and Nasdaq. Prior to joining Chain, she conducted research at Cambridge University on cryptocurrencies and distributed ledger technology. Carlson began her career as a credit trader at Goldman Sachs, where she later worked in research. She holds a BA from Harvard and a MSc from Oxford.
Long Chen, Chief Strategy Officer, ANT Financial Services
Long Chen is Chief Strategy Officer at Ant Financial, an online payment services provider affiliated with the Alibaba Group. Chen also serves as the Deputy Director of the China Internet Finance Research Institute of the People’s Bank of China, Deputy Director of the Internet Securities Committee of the Securities Association of China, and Deputy Chairman of the Internet Committee of the Insurance Association of China. Chen received his PhD in Finance from the University of Toronto, Canada.
Chris Church, Chief Business Development Officer, Digital Asset
Chris Church is the Chief Business Development Officer of Digital Asset, a New York headquartered financial technology company that builds encrypted processing tools for wholesale financial service providers using distributed ledger technology. He also sits on the Fintech Advisory Committee for the Ontario Securities Commission. Church was also part of the executive team that founded Radianz, Inc, the world's largest extranet.
Santiago Fernandez de Lis, Chief Economist of Financial Systems and Regulation, BBVA
Santiago Fernández de Lis is Head of Financial Systems and Regulation at BBVA Research. He joined the Banco de España in 1986, where he held several management positions, among them Head of the Monetary and Financial Division and Director of the International Department. Between 1998 and 2000, he worked in the Bank for International Settlements (BIS) in Basel. He is an economist from Universidad Autónoma de Madrid and was a lecturer in Universidad Carlos III (Madrid).
Greg Medcraft, Fellow, Harvard Berkman Klein Center
Greg Medcraft is Chairman of the Australian Securities and Investments Commission (ASIC). Prior to joining ASIC in 2009, Medcraft had a distinguished career in investment banking. He was the CEO and Executive Director at the Australian Securitization Forum and co-founded the American Securitization Forum. He was also Chair of the International Organization of Securities Commissions Board in 2013-2016.
Patrick Murck, Chairman, Australian Securities and Investments Commission
Patrick Murck is a fellow at the Harvard Berkman Klein Center for Internet and Society, and a Special Counsel at Cooley LLP. He is a lawyer and expert on bitcoin and blockchain-based technologies. He conducts research into the law and policy implications of bitcoin, distributed ledgers and smart contracts. Previously, Murck was a co-founder of the Bitcoin Foundation. He was named among America’s 50 Outstanding General Counsels for 2014 by the National Law Journal.
Marco Santori, Partner at Cooley LLP
Marco Santori is a Partner at Cooley LLP, an international law firm based in California and leads their global FinTech practice. Santori counsels banks, broker-dealers, exchanges, payment processors, institutional miners, and other companies making new and exciting uses of distributed ledger technology. He is the Legal Ambassador for the Delaware Blockchain Initiative and was called “The Dean of Digital Currency Lawyers” by an American Banker journalist.
Alex Tapscott, CEO, Northwest Passage Ventures
Alex Tapscott is the Executive Director of the Blockchain Research Institute, and sits on the Advisory Board to Elections Canada. He is a founding Member of the World Economic Forum’s Global Futures Council on Blockchain and is a globally recognized thought-leader, speaker and writer focused on the impact of emerging technologies on business, society and government. He is the co-author of Blockchain Revolution. He is a graduate of Amherst College (cum laude) and is a CFA Charterholder.
Carolyn A. Wilkins, Senior Deputy Governor, Bank of Canada
Carolyn A. Wilkins is Senior Deputy Governor of the Bank of Canada. Wilkins represents the Bank at the Financial Stability Board (FSB) and chairs the FSB’s Regional Consultative Group for the Americas. She previously served on the Basel Committee on Banking Supervision and chaired its Working Group on Liquidity. She earned economics degrees from Wilfrid Laurier University and the University of Western Ontario.
Bradley J. Wiskirchen, Chief Executive Officer, Kount
Bradley J. Wiskirchen is the founding CEO of Kount, the premier fraud prevention solution for card-not present transactions. Prior to December 2015, Wiskirchen was CEO of Keynetics and Executive Chairman of ClickBank. He was also the Chairman of the Board of the Salt Lake City Branch of the Federal Reserve Bank of San Francisco in 2014 and 2015. He was awarded a J.D. from the University of Notre Dame, and a B.A. from Brigham Young University.
Ryan Zagone, Head of Regulatory Relations, Ripple
Ryan Zagone is Director of Regulatory Relations at Ripple--a payment technology company named as one of the MIT 50 Smartest Companies, and the recipient of the WEF’s Technology Pioneer Award. He serves on the Steering Committee of the Federal Reserve's Faster Payments Initiative. He also sits on the advisory board of the United Nations’ Better Than Cash Alliance. Previously, Zagone focused on product strategy at Deloitte and regulatory policy at the American Bankers Association.
The seminar focused on the transformational changes in the provision of financial services, with the advent of new technologies, and the related risks and opportunities. The roundtable discussion comprised FinTech experts from the public and private sectors, and academia. Panelists were asked to respond to a series of specific questions on how new technologies could disrupt the nature and provision of financial services and the implications that these changes may have for financial stability and regulation.
Key Points:
- Artificial Intelligence (AI) and Distributed Ledger Technology (DLT). Panelists agreed that AI and DLT technology will bring fundamental changes to financial services provision. Carlson highlighted that while AI will transform the way people interact with markets, DLT could have a more significant impact, changing the underlying market structure, including by adding new assets classes.
- Demand for large universal bank services. Panelists stressed that FinTech would not reduce the need for universal banks. Church and Long highlighted that while banks must use technology to improve efficiency to remain viable, trust between customers and banks’ will also play a key role in ensuring universal banks do not become redundant. Fernandez de Lis added that banks are likely to remain the most efficient way to transform investments into loans, provided they are able to adopt technology to transform business models.
- FinTech and financial stability. Wilkins noted that while some FinTech activities can increase volatility, this does not necessarily jeopardize financial stability, and that FinTech can also provide benefits, such as increased financial inclusion and transparency. Medcraft highlighted the need for regulators to be adaptive to change, develop the necessary tools to respond, and to be technology neutral in their approach to managing financial stability risks. Zagone underscored the need for a principles based models, rather than a standard approach, to identify and mitigate risks from FinTech. Panelists stressed that FinTech can also reduce financial sector risks by improving oversight, reducing leverage, and improving inclusion.
- FinTech and financial regulation. Murck noted that FinTech can support financial regulation, including AML/CFT efforts, by improving transparency and reducing information costs. Tapscott added that real‑time records could help regulators to respond more quickly, allowing regulators to use a lighter touch and reducing the regulatory burden on the economy. Santori countered that the resulting decentralization of finance could significantly hinder regulatory efforts, by making it more difficult to distinguish how and who to regulate.
Quotes:
“To get real intelligence about a transaction, you need both the artificial intelligence executing policy, and human intelligence/experience designing the policy.” Bradley J. Wiskirchen, Chief Executive Officer, Kount
“Often the volatility that we worry about isn’t the problem in and off itself, it is just that it uncovers some underlying problem that was already there, like excess leverage or a credit cycle that has gotten out of control. So, I would rather that we focus more on those underlying structural problems... than on the volatility itself.” Carolyn A. Wilkins, Senior Deputy Governor, Bank of Canada
“(Transparency) is the accelerant and the fire for the market. It is the thing that drives people’s transactions. It allows for trust to develop throughout the market and (for persons) to be able to quickly ascertain who owns what and who you are actually dealing with across the table.” Patrick Murck, Fellow, Harvard Berkman Klein Center
“It is pretty clear that governments and regulators lack a lot of the resources, the knowledge, the where with all to make informed decisions all the time, and so they will have to engage with other stakeholders, and they will also have to use a tool box of technology and solutions to improve how they do their job.” Alex Tapscott, Executive Director, Blockchain Research Institute