Productive financial sector allows for more efficient resource allocation among different segments of the economy. Maintaining a resilience financial system allows for smooth functioning of the financial markets and keeps systemic risks at bay. And, an inclusive financial system ensures that benefits from economic growth can be shared fairly across the whole society, fostering stable social and economic environment conducive for sustainable growth. Ladies and gentlemen, 3-7  Amidst the rapidly changing technology, fintech can be and must be an instrumental driver of financial sector policy to fulfill the three key imperatives of productivity, immunity, and inclusivity. On productivity front, fintech can enhance efficiency in financial services. Rise of new electronic payment ecosystem can enable more efficient transfer of funds and significantly lower transaction costs for customers. Adoption of fintech platforms will allow banks to scale down on the high cost brick-and-mortar delivery model and shift to less costly and more efficient digital services. Lending process can be made much more efficient through usage of transactional data from e-commerce and payment platforms, and banks’ business model could change from collateral-based lending to information-based lending. Meanwhile, blockchain has advanced technology behind many aspects of the financial services, especially back-office operations and fund transfers. All of these help lower cost of financial transactions and improve ease of doing business for banks and customers, thereby improving productivity of the economy as a whole. On immunity front, prudent application of fintech can help banks and businesses improve their risk management.

Along the normalization path, one should expect to see market corrections 2-7  and volatile asset prices. On top of this, rising US trade protectionism has raised concerns over global trade, investment, and production, and further measures could be retaliated. Global warming and geopolitical risks also increase in many regions of the world. Besides, rapidly changing technology could be disruptive for incumbents in many industries and also bring new forms of risks, ranging from cyber threats to strategic risks of existing business models. All these uncertainties necessitate that building sufficient immunity becomes a key consideration in any financial sector policy. Third is the notion of inclusivity. We need to understand that any financial sector policy without consideration for inclusivity cannot be sustained. This is especially important for Thailand and many countries in our region where income and wealth inequality is one of the most pressing social and economic issues. Any policy or action that does not pay attention to the issue of inequality can threaten long-term social and economic stability, as those with higher capital can more easily reap benefits from economic growth and new technology, leaving those without access to new technology or know-how further behind. Eventually, inequality in income, wealth, and opportunity can raise social polarization, resulting in political gridlocks as seen in many countries. Ultimately, policies that make improvements in all of these three key imperatives can uplift the real economy and standard of living of people as a whole.