norman t l chan : black bear – blue ocean – wanton noodle speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the hong kong management association fellowship award dinner, hong kong, 26 november 2013. * * * dennis ( sun ), alfred ( chan ), victor ( lee ), ladies and gentlemen, 1. i feel very honoured to have been invited to speak at the hkma fellowship dinner tonight. this is not only because the hong kong management association has been a forerunner in enhancing the standards of management and governance in hong kong, but also because the hong kong management association and the hong kong monetary authority share the same initials “ hkma ”! hence, attending the fellowship dinner tonight has double meanings for me as the chief executive of the hkma. 2. management is crucial as it embraces knowledge, skills, culture and leadership that would guide and shape the future of an organisation, whether it is public sector or private sector body or whether it is profit - seeking or non - profit - making entity. there is no doubt that, with increased globalisation and technological innovation, markets in different geographical localities have become more interconnected. one author has described the phenomenon as the “ world has become flat ”. 3. an important outcome of the interconnectedness of markets is that competition has become much more intense and ferocious. talking about competition, let me share with you this story. 4. one day two men went together hiking in the mountain. while happily walking and talking, they bumped into a giant black bear which was apparently in a bad mood and in need of some nutritious food. even though this was their very first encounter of a big bear in the wilderness, the ferocity displayed by the bear cast no doubt in their minds that their lives were at stake. so the two of them ran as fast as they could downhill and soon they reached the flat land at the bottom of the hill. unfortunately the bear appeared to be quite determined to get the catch of the day and was chasing them from 50 yards behind. suddenly one man stopped running and took out his running shoes from his knapsack to put them on. the other guy was very puzzled and asked : “ what are you doing, you stupid? i don ’ t think you can run faster than the bear even with your running shoes on! ” the other guy replied : “ yes, i know this. but it would be good enough if i can run faster than you

players was in fact enabled by the new eu regulatory framework on retail payment services ( the payment services directive 2 ), which transferred ownership of client data from banks to clients and transformed financial data into a commodity accessible for both financial and non - financial entities. thus, both market and regulatory drivers have created a more competitive landscape that can lower costs and be beneficial for consumers but, at the same time, poses risks for financial stability, competition and data protection that should be carefully assessed by legislators and competent authorities. this evolution is accelerated by the way technology and digitalization are changing business models and the way services are offered in the financial market. digital platforms and technologies such as cloud and apis ( application programming interfaces ) allow the commingling of payment and financial services with services or products from other sectors, disintermediating banks and other traditional players and transforming them in “ white label ” service providers. crowdfunding and invoice trading platforms are developing and becoming more competitive in providing funding to the real economy. the increase of instant lending, also due to the availability of large data sets and the use of ai / ml, will allow clients to know the outcome of a request in real time and will probably require a rethinking of traditional business processes and of the role of back offices. for incumbents, these evolutionary trends will imply a growing pressure on profitability, the reconsideration of their business models and ever - increasing investments in r & d and in the adjustment of current it infrastructures. so far, many traditional players are coping well with this challenge by not entrenching themselves in defensive positions but rather opening towards partnerships and collaborations with new fintech start - ups and big techs ( so called “ coopetition ” ). “ coopetition ” will be a key strategy for each player of this new financial scenario in order to leverage on existing strengths and to develop services and products fit for the new market. of course, this new cooperative model will be effective only if an open ecosystem and a level playing field are ensured for both incumbents and newcomers, so that everyone can access and compete on the digital platform economy. in an already transforming technological and business environment, the covid - 19 pandemic came along and forced a rapid and large - scale reorganization of the offering of services and products. in a short period of time, social distancing and lockdown measures were introduced and the shift towards digitalization, which was already happening before the pan