Because every financial service provider is different and they might operate on different systems, we need to make sure that these different systems can communicate, that money and data can flow among them—in other words, that they are interoperable. And this is where standards come in. Common standards—be they for data structure, QR code payment, or biometric authentication—would allow us to benefit from competition between systems, while ensure that the competing systems are interoperable, and the financial network as a whole does not become fragmented. The concept of 3  interoperability can also be extended internationally, as we have seen in the case of cross-border QR codes for payment in ASEAN. The third principle is creating the right incentive structure. Ensuring that both service providers and customers benefit from any given financial technology and digital financial services is critical for the adoption, the continued development, and ultimately the sustainability of those innovative financial services. In addition to convenience and pricing, an important aspect that would incentivize customers to adopt digital financial services is the confidence in digital finance. Customers need to be safeguarded against technology-related risks. A desirable incentive structure must also be able to limit distortion of market power, especially by dominant market powers who could undermine ongoing competition, and hence innovation. Making sure that our digital finance ecosystem has the right incentive structure will provide a foundation for wide adoption by customers, ongoing innovation and upgrade of services by financial service providers, and market access among new innovative players.

These include Thai banks’ aim to reduce cash usage and payment cost, leading to collective investment in the new faster pay infrastructure; banks’ and non-banks’ leveraging on the interoperability of our open infrastructure and common standards to compete and expand the range of products and services; and regulators’ and policy agencies’ active roles in promoting financial innovations and digital adoption. FinTech and digital finance have been and will continue to be among the top policy agenda of the Bank of Thailand. We need to further develop digital finance infrastructure, promote innovation, enable dynamic competition, and enhance adoption by the Thai people and businesses. Ladies and gentlemen, While technology advancement and technology adoption will remain crucial, there is another important aspect of financial services that we must not forget as we move on with our FinTech agenda: the value of financial network. Unlike other products and services, financial services will serve the people and the society best only when money—either in the form of physical cash or digital money—can freely flow without cost and friction. In today’s digital world, it is equally important that individuals and society can benefit from financial transaction  2  data. Therefore, preserving and strengthening the value of financial network will be imperative in advancing the development of our financial system. On the opposite end of a strong financial network is fragmentation, whereby financial systems and payment services become fragmented by the use of different core infrastructures or different standards that are controlled by a few dominant players.