SFF 2024 | Thailand's Digital Finance Journey: Lessons for ASEAN

Summary

The transcript discusses the challenges and advancements in digital infrastructure, cybersecurity, and regulatory practices within ASEAN countries, particularly in relation to digital IDs, payment systems, and fraud prevention. The conversation highlights the shift from unauthorized to authorized fraud, emphasizing the need for global collaboration on cybersecurity. It also addresses the struggle regulators face in fostering innovation while maintaining safeguards. Finally, the speaker reflects on the slow but steady progress in these areas, with a focus on improving open data systems and cross-border integration in ASEAN.

Takeaways

• 😀 Unauthorized fraud prevention in mobile banking has shifted towards addressing fraud in authorized transfers, highlighting a new challenge in the financial landscape.
• 🔒 Security measures like biometrics and authorization were implemented to counter unauthorized transfers but need to be adapted for authorized fraud scenarios.
• 🌍 There is a strong case for global cybersecurity monitoring, as some issues (e.g., concentration risk, cross-border fraud) can't be solved at the national or regional level.
• 🔄 Cross-border fraud is a growing concern, and protocols need to be put in place for handling such fraud across different regions.
• 🏦 ASEAN countries have made progress on domestic payment systems, but there is still work to be done on connecting digital IDs and improving open data integration.
• 💡 The fragmented nature of digital ID systems across ASEAN countries is hindering progress in creating a unified infrastructure for the region.
• 📊 Open data remains a significant challenge in ASEAN, with much more effort needed to ensure proper data sharing across markets.
• 🌐 Regulators need to carefully balance innovation with caution, avoiding over-regulation of new technologies to prevent stifling innovation.
• 🚫 Central bankers and regulators focus on setting 'red lines' or guardrails for innovation rather than predicting specific outcomes, providing a framework for acceptable risks.
• ⚖️ Regulatory approaches must be flexible and avoid validating potentially harmful practices by being too quick to regulate new technologies.
• 📚 The speaker's personal plans after their tenure involve focusing on travel and reading, with no specific ambitions related to fintech or other professional endeavors.

Q & A

What are the key challenges in managing fraud in the mobile banking sector?

The key challenges include preventing unauthorized transfers, securing mobile banking apps, and dealing with authorized fraud where users themselves approve transfers under fraudulent circumstances. While some measures like biometrics and authorization protocols help with unauthorized fraud, they are less effective against authorized scams.

Why is cybersecurity monitoring important at a global level in the financial sector?

Cybersecurity monitoring at a global level is crucial because certain issues, such as concentration risk and cross-border fraud, cannot be adequately addressed at a national or regional level. Sharing information, best practices, and protocols globally helps mitigate these risks.

What progress has ASEAN made in the area of digital payment systems?

ASEAN countries have made significant progress in domestic payment systems, which are relatively advanced compared to other regions. However, cross-border payment systems still have room for improvement, and there are ongoing challenges with connecting digital identities and data systems.

What are the barriers to connecting digital IDs and payment systems in ASEAN countries?

The primary barriers include fragmented systems where different countries have their own approaches to digital IDs and payment networks, making it difficult to create a unified, interconnected system. For example, Thailand has both a national digital ID system and a government-issued Tha ID, complicating integration.

What is the current state of open data initiatives in ASEAN countries?

Open data initiatives are lagging in ASEAN, with much more effort needed to push forward data connectivity and openness across the region. While some progress has been made in payments and digital IDs, data sharing and access remain areas requiring substantial work.

What regulatory approach should be taken toward fintech innovations?

Regulators should focus on defining the outcomes they do not want rather than being overly prescriptive about innovations. This 'guardrail' approach allows for innovation while ensuring critical risks are mitigated. Furthermore, regulation should not be rushed to avoid stifling innovation or prematurely validating potentially harmful technologies.

How do regulators balance innovation and risk in the financial sector?

Regulators balance innovation and risk by setting clear 'red lines'—defining what should not occur—while avoiding too much regulation that could stifle innovation. They also need to refrain from validating emerging technologies too early, as over-regulation or premature regulation might inadvertently give legitimacy to problematic innovations.

What is the key issue with cross-border fraud in the financial sector?

Cross-border fraud poses a significant challenge because it requires international cooperation and protocols. As fraud is not confined to one jurisdiction, the lack of common frameworks for dealing with cross-border fraud complicates enforcement and remediation efforts.

What role does global collaboration play in improving the cybersecurity infrastructure in finance?

Global collaboration is essential for improving cybersecurity in finance. Sharing information, protocols, and best practices among countries can help address issues that cannot be solved by individual nations, such as fraud that crosses borders and systemic risks that are larger than any one country’s capacity to handle.

What are the future plans of the speaker in relation to fintech after their term ends?

The speaker has no specific plans to continue working in fintech after their term ends. Instead, they plan to focus on personal interests, such as reading books and traveling, with no ambitions to take on any fintech-related roles in the near future.