The global population is aging. Decreasing fertility rates and increased life expectancy will lead to one in six people in the world being at least 65 years of age, with the majority of these residing in what are currently low- and middle-income countries. 

 

This shift challenges established financing models for the global economy, with fewer workers and more dependants. It promises to increase strain on social contracts, and the expectations of healthcare, pensions and economic models. Already, growing pensions gaps have seen a rise in retirement age, both official and effective. System failures, such as the gender pay gap, further exacerbate these challenges[1].

 

This roundtable considers the implications of a pensions gap in an aging economy, and the policy and practitioner changes that need to occur to support the needs of an aged population. How might residents find purpose and productivity in their silver years? What are the infrastructure and skills that need to be developed to support productive longevity[2]? 

Financial crime, including money laundering, terrorism financing, and fraud, is a growing concern in the Asia-Pacific region, where rapidly-evolving financial sectors, the rise of fintech innovations, and cross-border transactions create an attractive target for illicit activities. The region's diverse economies, coupled with varying levels of regulatory maturity, have highlighted the need for robust, harmonised efforts to combat these threats.

The rapid evolution of Open Banking and Open Finance frameworks across APAC and globally presents both opportunities and challenges for regulators, financial institutions, and consumers. This roundtable aims to examine the current landscape, identify key success factors, and explore future trajectories through three core lenses:

 

1.     Regulatory Frameworks and Implementation Learnings

The Cambridge Centre of Alternative Finance will present the findings from their new report, “APAC State of Open Banking & Open Finance”, which builds on their Global study and provides an in-depth overview of the state of data sharing in a variety of APAC jurisdictions. The novel insights and ensuing discussion that emerge will highlight the critical success factors, ways to address challenges (e.g., standards, liability frameworks) and supervisory approaches for managing regulatory and consumer risks. It will also explore the regional collaboration opportunities

 

2.     Commercial and Operational Considerations

Acknowledging the recurring discussion within this landscape around the commercial and operational considerations to ensure a sustainable and responsible development of open data and data sharing approaches, this discussion seeks to present alternative perspectives. Discussants will focus on exploring novel business models, finding the right balance between privacy-by-design principles and commercial viability, including the development of sustainable cost recovery models and fee structures. They will examine the complexities of authentication and consent management, alongside market adoption drivers and evolving partnership models between incumbents and new entrants. The discussion will also address operational requirements spanning customer trust-building, security, and data quality management that are essential for long-term success.

 

3.     Future Evolution and Sustainability

Looking toward the future, the third focus area explores the sustainable evolution of these frameworks.  Discussants will examine the natural progression from Open Banking to Open Finance and Open Data, considering both environmental and social impact dimensions such as financial inclusion and SME access to finance. The discussion will explore regional integration possibilities, emerging use cases beyond traditional banking, and the impact of expanding into other sectors such as energy. Particular attention will be paid to the evolution of data ownership rights and integration with broader digital economy initiatives, ensuring we address the long-term sustainability of open banking ecosystems.

In the paper, “The Path to Inclusive Capitalism: An Asset Owner Guide for Investment Portfolios”, the Milken Institute provided 17 strategies anchored on 4 pillars to enhance efficiency and value creation opportunities.  7 actions were recommended to support success including convening intentionally, connecting with emerging asset managers and women- and diverse-owned asset managers.  This roundtable seeks to do just that, while also considering other recommended actions such as the development of a scorecard based on appropriate data and metrics for inclusive capitalism. 

Financial authorities from across the world are exploring different approaches to enable and support the adoption of distributed ledger technology in financial markets.

 

In an era of geopolitical competition and mounting investment needs, asset tokenisation holds the promise of improving competitiveness and contributing to growing and developing more liquid and efficient capital markets. However, tokenisation also presents risks, and an overhaul of regulatory frameworks and financial market infrastructure are arguably required for tokenisation initiatives to scale at jurisdictional and global levels.

 

Some advanced economies have taken a targeted, collaborative approach to supporting tokenisation, with the development of sandboxes and the launch of public-private initiatives (e.g. Project Guardian). Rather than importing developed market models, Emerging Market and Developing Economies (EMDEs) may have an opportunity to build new market structures that leapfrog traditional systems and traditional financial market infrastructure. Yet, sustainable growth in tokenisation will require appropriate regulation and oversight.

 

The objective of this regulators-only roundtable discussion is to identify the challenges and foster alignment on recommendations for building appropriate regulatory frameworks to enable tokenisation to scale. Participants will take stock and discuss the lessons from established regulatory innovation initiatives and how they are evolving with the market and technology, before exchanging views on the differing risks and opportunities for advanced and EMDEs.

A new generation of ‘PolicyTech’ tools and data leveraging AI technology is enabling stakeholders in the financial system to more efficiently analyse regulatory policy. For regulatory authorities, these tools and data can increase the precision of analysis to support policy development while regulated firms can acquire a more granular assessment of their operational risk.

 

The Asia Development Bank (with the support of the World Bank and the US Treasury) and RegGenome (a regulatory data technology company spun out of Cambridge University) are collaborating to build a digital platform for regulators in the Asia Pacific region. This is a sub-project within ADB’s Correspondent Banking Relationships Across the Pacific project and seeks to achieve the following aims:

• Make it easier and faster for regulators in the Asia Pacific region to self-assess and evidence adherence to FATF standards through like-for-like comparisons
• Allow regulators to more regularly and meaningfully benchmark against peers, identifying good practices
• Build confidence in the local regulatory framework among regulated firms through more regular and detailed mappings of local regulatory frameworks – especially those under-served by commercial vendors.

 

This session will consider the breadth of existing policies and current impediments to policy development, how AI may overcome these and the necessary conditions for this to be successful.