Second, is to bring in successful innovation and expertise from all parts of the world. With operations in multiple economies, international banking is uniquely placed to realise this aspiration. However, it has yet to be utilised fully. All too often, while international banks have been genuinely innovative in some advanced countries, such innovation and expertise are not dynamically translated to the operations in developing economies, despite being part of the same bank. It is equally important that such innovation is accompanied by appropriate safeguards on the part of national authorities to preserve financial stability. Third – and this is where I would like to push the borders of conventional thinking – a new international banking model should also be one that intertwines itself into the very fabric of the local community, seeking to address social issues that concern the nation and its people. This should come as no surprise. In this way, international banking is no longer an outsider or an aloof bystander, but an integral part of the socio-economy in the country. One can imagine the strength and ethos of a banking sector that promotes issues of home ownership, urban poverty, social inequality, financial literacy and resilience of households to financial shocks. This would truly be “banking without borders”. This is a critical point given the increased expectations globally on multinational companies.
Around USD13 billion was invested by venture capital players in fintech startups in 2017, the third highest annual total this decade. Among these, the most impressive transformation is perhaps in cross-border payments. Allow me to share an anecdote highlighting the magnitude of the change that is happening. Earlier this year, eight Chinese tourists went on a six-day trip to Finland courtesy of a Chinese online payment platform company. This trip was significant for two reasons. First, payments for the entire journey was cashless and performed through a mobile app, from the payment of flight tickets to food, ground transportation and other retail purchases. Secondly, Finland, located as far as 6,000 km away from China, became the first country where this Chinese app can be used to make virtually all payments. This is just the beginning. As fintech companies expand to other markets and enable seamless cross-border payments for other users, one can already imagine a future where one can travel the world with just a smartphone in hand. Not only that, another related consequence of such a future is that essentially all we know of “international banking” today could be performed without an actual bank. Naturally, we ask ourselves what are the implications of these changing boundaries of international finance? For financial customers, it means adapting to a new banking paradigm. A more regional and digital banking ecosystem could lead to increasing localisation, personalisation and efficiency of financial products and services.