MANILA, May 3 (Xinhua) -- Asia and the Pacific needs to improve financial inclusion using new financial technology (fintech), according to a joint seminar co-hosted by the Asian Development Bank (ADB), the International Monetary Fund (IMF), and the Central Bank of the Philippines (BSP) here on Thursday.
Participants at the seminar said Asia and the Pacific has made important progress in expanding and deepening its financial systems, but must make further progress to improve financial inclusion using new fintech.
"Governments in the region can improve financial inclusion by broadening access to basic digital infrastructure and providing an enabling environment for innovators and entrepreneurs," ADB President Takehiko Nakao said.
"Policymakers should also consider ways to improve regulations, including protecting consumers against cybercrimes and fraud, while striking the right balance between innovation and financial stability," he said.
Panelists at the seminar titled "New Technologies in Finance: Opportunities and Challenges for Asia" included IMF Deputy Managing Director Mitsuhiro Furusawa, BSP Governor Nestor Espenilla, Chair Professor at Korea National Diplomatic Academy Oh-Seok Hyun, and Director of Social Impact and Public Regulatory Affairs for the IOTA Foundation Julie Maupin.
Panelists discussed how fintech, including new innovations like distributed ledger technologies, virtual currencies, machine learning, and big data, can improve financial inclusion.
They said the lack of access to financial services is widely viewed as a key challenge for Asia's poor households and smaller firms. About two billion people in the world still do not have access to finance and half of them live in Asia and the Pacific.
"Fintech can help foster financial inclusion in Asia by its ability to reach rural areas, making financial services more affordable, and broadening access to small and medium-sized firms," Furusawa said.
"Financial regulators will play a crucial role in creating an environment that promotes financial inclusion while mitigating the risks."
Seminar participants also agreed that new technologies hold promise for bringing financial services to poorer communities and for overcoming the challenge of obtaining the collateral needed to access formal credit markets.
International financial institutions such as the IMF and ADB can play a significant role in supporting countries as new technologies are introduced.
"There will always be a trade-off or a healthy tension between security and convenience as well as efficiency and financial integrity. That is why the BSP has established a regulatory environment that allows innovations to flourish, at the same time ensures that risks are effectively managed," Espenilla said.
ADB said it supports many fintech initiatives in developing Asia. In 2017, it said ADB, Cantilan Bank in the Philippines, and Oradian, an IT company, launched a pilot cloud-based banking platform to enhance financial inclusion in Mindanao in the southern Philippines.
To lead efforts to promote and further mainstream digital technology in ADB projects and programs, the bank said ADB established a new Digital Technology for Development Unit within the Sustainable Development and Climate Change Department in March 2018.