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Shaping the Future of Banking at Point Zero Forum 2024

Disruption Banking at the Point Zero Forum

It’s a mild summer day in the Swiss capital of Zurich. We are in the midst of the Euros, but football isn’t the only topic on the agenda. If you are in Zurich another big event is taking place. The Point Zero Forum organised by Elevandi kicked off for the third time on the 1st of July 2024. Speakers, delegates, and organizers of the event are all here to help shape the future of banking.

The strength of the Singaporean contingent at the event is palpable. Elevandi is an independent entity initiated by the Monetary Authority of Singapore. One of the three big events the entity is responsible for is the Point Zero Forum. This year’s gold sponsors include Amazon, Binance, Circle, iCapital, Paxos, and Ripple. Bronze sponsors include HSBC and UBS. Many of the attendees are wearing suits. Not many of them are sporting jeans and T-shirts.

The event is opened by an interview with Axel Weber. Navin Suri, Founder & Chief Executive Officer at Percipient and Advisor to the Board of Directors at Elevandi raised some interesting questions for Axel to answer. Axel was previously the chairman of UBS and lived and worked in Zurich for many years. He is currently the Advisory Council Chair of the Visa Economic Empowerment Institute.

One of the questions that Navin raised was about how Europe is falling behind the U.S. in terms of GDP and innovation. Another was on the topic of the amount of regulatory fragmentation that we are seeing today. The gentlemen went on to discuss the need to invest in emerging markets to support the drive for sustainability. Finally Navin suggested that multilateralism may be in decline, not to mention what has happened to globalization.

Manage the Risks, Harness the Benefits

Next to take centre stage was Ravi Menon, Ambassador for Climate Action and Senior Adviser to the National Climate Change Secretariat in Singapore. Ravi has also previously been the Managing Director of the Monetary Authority of Singapore meaning he was well placed to set the agenda for the Forum.

Ravi wanted the audience to focus on three key topics. Namely asset tokenization, artificial intelligence and quantum computing.

Tokenization is not a new topic, and it is very interesting to see the likes of Chainlink, Ripple, Binance and even Hedera represented at the Forum. It is no accident that these influential blockchain companies are in attendance. It’s almost like 2024 is the year of all things tokenized and the time for these companies to shine is finally here.

Asset Tokenization

Ravi shared with the audience recent successes in the tokenization of bonds or money market funds. He shared how tokenization encompasses critical features that can fundamentally transform the nature of financial contracts, direct exchange and fractionalization.

Fractionalization was populated through the rise of the retail investor which happened during the time of the pandemic. Today this topic is even more important. Ravi shared how the fractionalization of assets gives a much broader range of investor access to these assets. He pointed at recent innovations at OCBC, Singapore’s longest established bank. In November 2023 BNY Mellon and OCBC announced that they are focusing on increasing the settlement speed and cost competitiveness of FX payments. The two financial institutions made it clear they will be looking at smart contracts and blockchain to achieve this. About the same time UBS, SBI, and DBS launched the world’s first live repurchase transaction (repo) with a natively-issued digital bond on a public blockchain. Ravi had a lot to share.

Artificial Intelligence

Ravi introduced the topic of AI by explaining how this technology had been used successfully in helping with credit scoring. Flagging anomalies of behaviour and a host of other benefits. He also pointed to four areas related to AI governance that need to be focused on, namely:

  • Privacy of data
  • Explainability of results
  • Accountability for decisions
  • Acceptability of outcomes

The discussion moved on to regulation of AI and the different ways that the EU, the U.S., and China are facing these challenges. Ravi highlighted how 37 different countries around the world had proposed AI related legal frameworks. But he focused on the three main players.

Ravi shared how “the EU had distinguished itself as a global leader in AI with the advent of the EU Artificial Intelligence Act.” He went into more detail about how the Act establishes binding rules for general purpose AI models and explained how it institutes a centralized governance structure at the EU level.

By contrast, the U.S. does not have comprehensive AI regulation, Ravi continued. He explained how over 400 bills had been debated in state legislatures in 2024 alone. None of them offer a comprehensive answer to AI regulation though.

When it came to China things were different. In China the state has been addressing AI related issues since 2017 with a roadmap that would take till 2030.

Quantum Computing

A few months ago we shared a story about how IBM is ensuring that the World is Quantum Safe. In the story we highlighted how the Monetary Authority of Singapore had cautioned financial institutions on the cybersecurity vulnerabilities introduced by the advent of quantum computing.

Ravi highlighted the problem in more detail. In the hands of the wrong people he believes that quantum computing technology could become an existential risk. He sees infrastructure such as the interbank system interface as at particular risk. To allay problems like this Ravi shared how the National Quantum-Safe Network (NQSN) was being rolled out.

The stage was set for the rest of the event. With workshops and meetings planned for the rest of the day we hope to share more insights about this prestigious event with our readers.

Author: Andy Samu

See Also:

How IBM is ensuring that the World is Quantum Safe | Disruption Banking

Senior Policymakers and Financial Leaders to Convene at Point Zero Forum on Generative AI, Digital Assets, and ESG Technologies | Disruption Banking

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