DTCC Connection

Jul 12, 2016 • DTCC Connection

Modern Payments for the 21st Century - What Will The Landscape Look Like?

By Corinne Lee

How are market, regulatory and technological/digital forces transforming the payments landscape? Nellie Dagdag, DTCC Managing Director of Industry Relations and APAC Sales & Solution Delivery, was among a panel of experts to address that question at the 3rd Annual EU-Asia Relations in Financial Services Symposium in Beijing.

The Symposium, organized by the Asia Securities Industry & Financial Markets Association (ASIFMA) and the Centre for European Policy Studies (CEPS), brought together an estimated 100 participants comprising high-level regulators, policy makers, academics, and sell-side and buy-side firm representatives. The objective of the symposium was to facilitate and enhance discussions among Europe and Asia around regulatory issues impacting EU-Asian capital flows and investments.

Dagdag shared her views and experiences during the panel session on “Modern Payments for the 21st Century – How will the Landscape Look Like?” The session focused on market trends, technology developments and how policy makers should balance the pace of change against the integrity of the payment systems given the various stages of maturity across different markets.

”Despite the preponderance of leading-edge payment technologies, such as mobile, contactless, instant payments and the blockchain, and market trends in B2C and B2B, local adoption varies significantly across the various Asian countries,” Dagdag said. “Further, each country has to deal with their own local constraints (e.g., internet bandwidth and cell phone density) to enhance payment infrastructures.”

“Despite the preponderance of leading-edge payment technologies, such as mobile, contactless, instant payments and the blockchain, and market trends in B2C and B2B, local adoption varies significantly across the various Asian countries.”

The panel was moderated by Dora Neo, Director, Center for Banking & Finance Law, National University of Singapore (NUS). Joining Dagdag on the panel were Yun Dong, Deputy General Secretary, Research Center of Payment and Settlement, Institute of Finance and Banking, Chinese Academy of Social Sciences (CASS); Esmond Lee, Executive Director, Financial Infrastructure, Hong Kong Monetary Authority (HKMA); and Helmut Wacket, Head Market Integration Division, DG Market Infrastructure and Payments, European Central Bank (ECB).

Summarizing the panel session on payments, Dagdag, commented: “Market, technological and digital forces are transforming the payments landscapes. Each market has to carefully assess which of these developments present real opportunities to leapfrog developments in their local payment infrastructure.

“This would require clearing the least number of obstacles, such as liberalizing the entry of foreign competition or funding the research or pilot programs of new promising technologies like the distributed ledger,” she added. “As the payment infrastructure is critical to the functioning of the economy, policy makers play a key role in the oversight of the payments system.  Hence, there should be regular reviews of the regulatory and governance framework for payments – to safeguard the interests of the economy and market players.”

The presentations during the two-day Symposium highlighted the Chinese capital market and economy, notably, its huge potential given the capital markets contribute only 10% as funding source with 90% coming from banks, fuelled by a domestic savings rate of 40%.

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