operating process, as well as in governance, finance and accounting practices. the financial industry should also address any negative perceptions by having an effective communication strategy and ensuring swift response time to sme customers, as these are vital in maintaining the integrity and public image of financial institutions. moving forward, it is imperative and almost inevitable for financial industry to undertake measures to advance financial literacy and capabilities of sme customers. the commitment to better serve the sme segment would reinforce the critical role of the financial industry in supporting the government ’ s development agenda in a well - functioning financial system. cgc has demonstrated that efforts to assist underserved smes can be achieved in a financially sustainable manner through its suite of innovative financial products and services. financial institutions should also explore strategic partnerships with adjacent industries such as telcos and fintechs to reduce market gaps and reliance on government subsidies for the smes. importantly, the financing ecosystem needs to be complemented with a comprehensive sme development ecosystem to nurture and elevate our smes towards greater size and competition. i hope today ’ s recognition and appreciation of fis and cgc customers would spur both parties to become more innovative, resilient and progressive. my heartfelt congratulations to all the winners and may you continue to inspire and set benchmarks on sme financing landscape. 3 / 3 bis central bankers'speeches

december 5, 2016 bank of japan digital innovation and fintech remarks at the paris europlace financial forum in tokyo haruhiko kuroda governor of the bank of japan introduction it is a great honor to have this opportunity to speak before the paris europlace financial forum. when i look back on my teenage years, i was passionate about science and technology, and i dreamed of a future in which people enjoyed traveling to other planets and talking with friends around the world by videophone. after decades of technological development, interplanetary travel is unfortunately still some way off, but innovation in information technology has evolved far beyond people's expectations over half a century ago. as a central banker, i am in a position to closely monitor the financial world, and recent developments in information technology, which are leading to wide - scale innovations in financial services, bring new excitement and challenges. such innovations have the potential to significantly change the global landscape of finance and economies. thus, today i would like to talk about financial innovation, which is attracting attention around the world as " fintech. " i hope my remarks will serve as a bridge to the afternoon sessions. technological innovation, economic growth, and finance innovation is undoubtedly a main driver of economic growth, and thus it has always been the focus of economic policy. historical studies show that global economic growth was considerably slow until the medieval period. the growth rate surged in the modern era when new industrial technologies were widely applied to economic activities. the financial industry, which emerged shortly before the modern era, has played an important role in enabling subsequent technological innovations to drive the growth of various industries and economies. by making use of sophisticated financial infrastructure, people discover promising new technologies. then, with the support of finance, these new technologies attract money and resources, develop as an industry, and eventually spread widely and are used by many people. looking back at the history of the automobile and airline industries as examples, the creation of the ford model t and the flight of the wright brothers happened in the early 20th century. without finance, those industries, as well as many other relevant industries, could not have grown so rapidly and led to strong economic growth in the 20th century. information technology and financial innovation as such, technological innovations since the industrial revolution have generated many new industries. the financial industry has a longer history than even many manufacturing industries, because basic financial infrastructure such as money, ledgers, and accounting came into being before or during the medieval period. nonetheless, ongoing innovations in