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Joint Press Communiqué: 55th SEACEN Governors' Conference / High-Level Seminar and the 39th Meeting of the SEACEN Board of Governors

11.20.2019

The Monetary Authority of Singapore hosted the 55th SEACEN1 Governors’ Conference / High-Level Seminar and the 39th Meeting of the SEACEN Board of Governors on 13 and 14 November 2019 in Singapore.

Digital transformation has been a fundamental driver of the ongoing move towards a digital economy, and the overall theme of the Conference was “Data and Technology: Embracing Innovation.” Governors and Managing Directors as well as delegates from SEACEN member Central Banks and Monetary Authorities participated in the event. This year’s SEACEN Governors’ Conference / High-Level Seminar and Board of Governors Meeting occurred in conjunction with the 4th Singapore FinTech Festival and the Singapore Week of Innovation in Technology (“SFF x Switch 2019”), complementing the theme of the Conference. Governors and Heads of Delegation toured SFF x Switch 2019 on the day prior to the Conference / High-Level Seminar.

Following the welcome remarks by Mr. Ravi Menon, Managing Director, Monetary Authority of Singapore, Mr. Indrajit Coomaraswamy, Governor, Central Bank of Sri Lanka, and Mr. Mangal Goswami, Executive Director, The SEACEN Centre, Mr. Agustín Carstens, General Manager, Bank for International Settlements (BIS) delivered the Keynote Address. Mr Carstens discussed the role of personal data in digital financial innovation. Data has a high value for financial services, allowing for better tailoring of financial products and more convenience. This benefits consumers – particularly those currently underserved by banks – and society. But he argued that the use and availability of such data presents new and complex policy trade-offs, and a clear need for domestic and international policy coordination. He also highlighted important questions about rights and control over data, and about how the gains from its use are distributed among customers, financial institutions, big techs and others. Fundamental questions about data privacy will depend on technological solutions but also social preferences in individual countries. Mr Carstens laid out three policy challenges for central banks and other financial authorities. Domestically, central banks and regulators will have to upgrade their understanding of the emerging issues and cooperate with local competition and data agencies that may have conflicting legal mandates. Another challenge is that much of financial regulation is based on international frameworks, while data protection is national, with different approaches in different countries. Finally, there could be challenges in trying to coordinate at a global level in the absence of an international agency responsible for personal data use. He concluded by commenting that all countries are approaching the same challenges from different directions, and while issues pertaining to data and data protection know no borders, the goal remains the same: a stable monetary and financial system underpinning a healthy and resilient global economy.

The Conference / High-Level Seminar consisted of two panels. The first panel on “A Data-Driven Economy” discussed the role and impact of data and digital borders in an increasingly interconnected digital economy. The three panellists, drawn from the FinTech industry, law and academia, addressed some of the contradictions inherent in a data-driven economy, which critically relies on the ability to aggregate, store, process and transmit – especially cross-border - data. On the one hand, cross-border data transfers facilitate e-commerce and e-payments, and cross-border data sharing enables a financial institution to properly, efficiently and effectively function as a financial service provider. On the other hand, it is paramount that privacy, confidentiality and the security of data, above all private data, are subject to stringent and reliable safeguards. Some of the impediments to the flow of data across borders stem from legitimate public policy objectives. The challenge for central banks will be to achieve these public policy goals within a necessary framework of international co-operation that facilitates trusted cross-border data flows. In their discussion, Governors provided views on how best to promote innovation while ensuring appropriate regulatory oversight. One suggestion was to move from entity-based regulation to more activity-based regulation. They also stressed the need for a harmonised framework on data governance across countries, including the inter-operability of the emerging technologies. Finally, they reiterated that data constituted a public good, highlighted the importance of data access, deliberated on the issue of data consent and commented on the positive benefits of having global principles for data analytics.

The second panel on “An Artificial Intelligence (AI)-Driven Economy” discussed how regulators can support the financial industry to better harness the transformative potential of AI and data analytics in a responsible and ethical manner. The three panellists were drawn from the insurance sector, FinTech industry and a supervisory/regulatory body. The rapid flow of data is seen as the logical next step in the digitalisation process. This is evident through the significant transformation of traditional operating models of financial institutions. AI may necessitate additional regulatory oversight as its use matures. The appropriate ethical and innovative uses of data and AI will require a concerted effort by central banks, regulators and the financial services industry. Governors deliberated the future role and prospects for AI and machine-learning in the provision of financial services. Governors noted the growing assistance of this technology in enhancing anti-money laundering efforts and the combating the financing of terrorism on an almost real-time basis. Three issues were deemed to be paramount: governance of data, the explainability of the results, and human accountability for the AI and machine-learning output. Governors felt that the adoption of such technologies should be guided by social acceptance underpinned by strong governance.

The Board of Governors expressed their appreciation to the outgoing Chairman, Mr. Indrajit Coomaraswamy, Governor, Central Bank of Sri Lanka, and to the Monetary Authority of Singapore for the excellent arrangements and warm hospitality in hosting this year’s SEACEN Governors’ Conference / High-Level Seminar and the Meeting of the SEACEN Board of Governors. Governors elected Mr. Ravi Menon, Managing Director, Monetary Authority of Singapore as the new Chair of the SEACEN Board of Governors. In addition, Governors approved the 2020 SEACEN financial budget as well as the programme of training courses and other activities for 2020.

Governors accepted with thanks the offer of the Autoriti Monetari Brunei Darussalam to host the 56th SEACEN Governors’ Conference / High-Level Seminar and the 40th Meeting of the SEACEN Board of Governors in 2020.

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1 The SEACEN members include Autoriti Monetari Brunei Darussalam, National Bank of Cambodia, People’s Bank of China, Hong Kong Monetary Authority, Reserve Bank of India, Bank Indonesia, The Bank of Korea, Bank of the Lao PDR, Bank Negara Malaysia, The Bank of Mongolia, Central Bank of Myanmar, Nepal Rastra Bank, Bank of Papua New Guinea, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, Central Bank of Sri Lanka, Central Bank, Chinese Taipei, Bank of Thailand and State Bank of Vietnam.

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