China’s BRI and cross-border payment innovation take centrestage at SWIFT China conference
SWIFT’s Greater China Regional Conference gathered over 300 banking leaders to discuss key industry challenges in Shanghai on 05 June 2018.
Primed as a key driver to the region’s economic growth, China’s Belt and Road Initiative (BRI) will cover about 65 percent of the world’s population, contributing to one-third of the world’s GDP, and about a quarter of all the goods and services the world moves. The BRI is expected to change the way the world trades.
Cross-border payments, an important constituent of the BRI, was a highlight at the conference, and featured throughout the event.
Enhancing digital finance to stimulate growth in the Chinese economy
In 2015, China rolled out the “Made in China 2025” and “Internet Plus” initiatives, and the country has been on a journey of digital transformation since. Successful digitalisation is crucial for the future of the Chinese economy, and will contribute not only to faster GDP growth, but to growth tied to productivity, innovation and consumption levels.
Stephen Gilderdale, Chief Platform Officer, SWIFT, notes that Chinese banks have always been early adopters of financial technology.
China Construction Bank (CCB)’s General Manager of Cash Management, Li Guojian, says that technology has helped the bank offer a more competitive suite of product offerings to customers, while mitigating business and compliance risks. In April, CCB opened an automated branch in Shanghai, run by facial recognition, AI and virtual reality. It has also installed 1,600 smart machines at its 360 branches across the city.
Luo Hao, Head of Fintech Cooperation, Tencent agrees. He says that big data and blockchain technology will continue to feature widely in the digitalisation efforts of China in coming years. Despite the interest around AI, the technology is only likely to become more widespread in the next decade. In China, Big Data has also been written into the 13th five-year plan, underscoring the importance it plays in both the government and private sectors.
Oscar Ramos, Partner and Program Director, Chinaccelerator, adds that data is the cornerstone of all technology – it is what drives technology.
Also according to Gliderdale, the industry is innovating faster than we used to. He cited SWIFT gpi as an example. In China, ten Chinese banks have gone live on its global payments innovation initiative (gpi) since its launch in 2017. Seventeen other Chinese banks have committed to SWIFT gpi in China and are in the process of going live. Together, these 27 banks represent an estimated 86% of cross-border payment traffic conducted by Chinese banks in mainland China.
Standardisation is key to the development of cross-border payments on the Belt and Road, which SWIFT supports through the use of its international messaging standard to improve interconnectivity and interoperability between financial institutions.
Gliderdale concludes: “There should be a balance between offering new technology for the sake of and adapting this technology to meet customer needs.”