Asean bankers expect 4IR to boost economies
THE Fourth Industrial Revolution (4IR) is impacting on the region’s economic ecosystems, a top banker has said.
“We need to build both our readiness and capacity to leverage as much benefit as we can from the economic potential of the 4IR while also working towards sustainable economic management,” Asean Bankers Association (ABA) chairman Phoukhong Chanthachack said at the 48th Asean Banking Council Meeting held in Brunei recently.
4IR theory says we are now living through the fourth radical change of society since the Industrial Revolution transformed the world in the 18th century. The 4IR is characterised by a fusion of technologies and blurring of lines between the physical, digital and biological spheres known together as cyber-physical systems.
The 4IR is also marked by technological breakthroughs in robotics, artificial intelligence, nanotechnologies, quantum computing, biotechnologies and the ‘Internet of Things’. Fifth-generation wireless technologies (5G), additive manufacturing, 3D printing, and fully autonomous vehicles are signs of the 4IR taking place.
“There must be a move from analogue to digital systems in our banking sector, given the significant economic potential of these transitions,” Phoukhong said. Phoukhong is also the Lao Bankers Association chairman and the Banque pour le Commerce Exterieur Lao Public general managing director.
“This new banking frontier is estimated to be worth up to $625 billion by 2030 or about eight per cent of Asean’s GDP for that year. It is one of the five strategic pillars in the Asean Connectivity Master Plan,” he said.
The meeting, hosted by the Brunei Association of Banks, saw Asean’s top bankers discussing topics of regional importance to the sector. This included developments in the finance sector, implementation of measures to increase outside participation in the region’s markets and introduction of best practice initiatives. Sustainable and responsible financing plus the need to foster connectivity among member countries by digitising the industry was also discussed.
An official statement from the conference predicted Asean’s banking sector to be a clear winner from the region’s rapid growth in GDP as conditions such as these usually drive strong growth in demand for financial services. This includes both retail and corporate banking services and in financial management.
Asean members endorsed proposals by its three permanent committees – Cooperation in Finance, Investment, Trade and Technology, Asean InterRegional Relations and Banking Education.
The committee for Cooperation in Finance, Investment, Trade and Technology will continue to promote sustainable and responsible financing by conducting awareness and capacity building workshops in the Asean countries. It also shared information about opportunities available in green bond financing with member countries.
The Asean Business Advisory Council and ABA agreed to work together to support the Banking Sub-Sector Working Group which is responsible for keeping abreast of issues that hinder the move of Asean’s banking sector into the digital era.
Committee members warned the initiative may be overly ambitious and that it faces a lot of challenges. However it could also be a significant move towards an economically integrated Asean region in the near future.
The 48th Asean Banking Council Meeting was held on November 7 and 8.