I will start off briefly with the past journey of Asian development, and then focus on how to prepare our bank centric financial system for challenges and opportunities that lie ahead in this rapidly evolving economic environment and financial landscape. Having a smooth-functioning financial system is of course a necessary condition for growth as finance is often referred to as the life blood of the economy. On the other hand, if the blood is infected, it could lead to severe malfunctions of the body and serious adverse consequences. Thus, going forward, in pursuit of the prosperity of Asia, I propose that the role of finance and banking must focus on three key words: “productivity, immunity, and inclusion”. I will come back to these three key words later in my talk. Ladies and Gentlemen, Let’s begin by looking back over the past fifty years. Undoubtedly, it has been an incredible journey of Asia’s achievements. From a primarily agrarian and poor region in the 1960s, Asia has transformed itself into today’s key engine of the global economy. According to the latest IMF’s World Economic Outlook, emerging and developing Asia is expected to 1  grow at 6.4 percent in 2017, making it the fastest growing region and contributing almost half of the world’s output growth. To get to where we stand today, Asia has gone through various rounds of boom and bust cycles.
Products that we should see more of are, for example, basic savings account with no minimum balance to cater for the low-income group, low-fee payment and transfer services, micro insurance for farmers, and increased information-based lending to small businesses complementing to collateral-based lending. 5  Despite the high level of access to finance in Thailand relative to other emerging Asian countries, the Bank of Thailand regards financial inclusion as one of our top priorities. In collaboration with both banks and non-banks, we have continually put our efforts to promote financial access in many areas. They include, for instance, SMEs’ credit guarantee scheme, free-of-charge fund transfer through our new faster payment system for any amount up to 5,000 Thai Baht (approximately equivalent to 145 US dollar), no-fee bank savings account, nano finance to accommodate small borrowers, as well as the new Business Securities Act to widen the scope of eligible collateral for secured lending. In addition, we will soon launch an unsecured debt restructuring scheme for individual borrowers with multi-creditors to address the household debt overhang. To ensure a “good quality” financial inclusion, financial literacy and financial technology literacy are crucial life skills for both households and small businesses. Effective financial literacy would help increased consumers’ financial discipline and understandings of financial products and their risks. Thus, deepening such basic knowledge and turning concepts into changing behaviour would be particularly helpful to shelter vulnerable businesses and households from getting themselves into over indebtedness or stuck with unsuitable financial contracts.