Monitoring Desk
DAVOS: Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, was among several leading participants who explored the benefits and risks of innovation for financial institutions — and underserved and the poor — at a World Economic Forum (WEF) panel discussion in Davos on Tuesday.
Saudi Finance Minister kicked off the session by highlighting the “legitimate concern and need” from conventional financial institutions and private sector actors. He said both would require to work together to address pertinent challenges.
The minister said there had been calls for financial innovation because of benefits, including inclusiveness but warned that regulators must be cautious to ensure these innovations do not influence market stability.
WEF panel discussion
“Conventional financial entities are rushing to innovate under pressure as these challenging innovators are introducing new ways of doing business that conventional institutions must deal with and catch up with,” the minister said.
NYSE Group President Lynn Martin noted regulators could be essential in bringing financial innovators into conventional financial organizations.
“We need regulators to tell us what are the guideposts, what are the rules, what is the regulated framework to bring them into more traditional structures,” Lynn Martin said.
Mark Suzman, CEO of the Bill & Melinda Gates Foundation, said that long-term financial innovation, if adequately democratized, could prove an enabling platform to ensure large-scale prosperity, including for the poorest people of the world. Suzman stated this could be achieved in particular through expanding digital payment systems.
