As technology continues to reshape our world, we must balance improvements in efficiency and customer experience with the concomitant risks. Today, the trade-offs are still not well understood because while some use technology maliciously, many more use it for a good cause. Only by embracing this advancement, and by working together with tech-players, can we synergise and fully reap the benefits for the economy. In response to these technological shifts, ‘RegTech’ developments ought to be a high priority for global financial regulators. An end goal is to balance the risks and opportunities within the technological sphere. Equally important here are the complementary roles of governments and industries in sharing information, so that we can holistically mitigate various aspects of security threats. The catalytic role of behavioural analytics and big data further provides us with tools to address threats channelled through the financial system. In order to adapt to the borderless nature of globalisation, international cooperation is vitally important. Beyond the financial sector, we must prepare our human capital for the future. Close collaboration between public and private sectors is critical to ensure that displaced workers are adequately retrained and equipped with new skills. Those dislocated should not feel sidelined. We can address labour displacement by investing in education, skills re-training and increasing women’s participation in the workforce. We need to take a hard look at the current landscape of social safety nets, and draw best practices – both those tried and tested, and practices that can best respond to new challenges and needs of society.
The full impact of these developments are only likely to be clear some years from now. This is indeed a most unfortunate situation. When factions exacerbate fractions, it damages even the most established forms of international cooperation. Third, the exponential speed of technological change has altered the global economic landscape and requires us to adapt fast. The proliferation of providers offer services that challenge the status quo. The dynamism of digital financial services redefines the nature of product delivery. It adds to the complexity of regulations and presents new challenges for economies, with broad consequences. Unattended, these challenges create risks that can stunt innovation, cause dislocation of labour and destabilise financial systems. Look at how ransomware attacks such as WannaCry and NotPetya have rattled internet users around the world. These virtual intruders infiltrated our synthetic selves, blocked access to our personal and professional files, and held us ransom by demanding payments to unlock them. These malwares infested computers operating on outdated and susceptible systems. For the financial sector, these recent attacks reinforce the lesson that, if we take a neutral stance to the IT revolution, we open ourselves up to weaknesses that can be extremely costly. For policymakers, these costs can have significant externalities that we must be concerned about. During World War II, Alan Turing and a team of experts took six months to crack the Enigma code. In contrast, today, Google can detect a virus in mere minutes through its algorithms.