Rearchitecting the global financial system

boat

Background

CFTE partners with Japan Fintech Festival and publishes several whitepapers. This is the whitepaper I contributed as a researcher.

Executive summary

This report draws insights from the ‘Rearchitecting the Global Financial System’ roundtable at the Japan FinTech Festival 2024, exploring the global financial system’s modernization and technological needs. The discussion generated actionable insights for the industry, addressing four central themes:



Part 1: Global Realities and Challenges The current financial system, established post-World War II, struggles to serve a diverse global population, including 1.5 billion unbanked individuals and SMEs needing financing. Inefficient systems, high remittance fees, and sustainability issues necessitate a strategic overhaul using modern technologies.



Part 2: Need for Rearchitecting the Financial System Experts discussed global financial changes inspired by innovations like India’s Aadhaar and Kenya’s M-PESA. They emphasized modernizing financial structures, leveraging technologies like blockchain, and adopting forward-thinking regulatory policies to enhance financial services' efficiency and accessibility.



Part 3: Understanding Digital Infrastructure Digital infrastructure is crucial for economic competitiveness. Integrating digital and financial systems, aligning local and global standards, and ensuring compliance are essential. Key aspects include cyber connectivity, digital identity, interoperable payments, and data exchange, pointing to a shift towards innovative global payment solutions.



Part 4: Success Stories and Recommendations Finance transformation is driven by public-private initiatives and FinTech companies like Ripple. Successes like India’s UPI system highlight the potential of digital payments and the need for leadership, strategic funding, and regulatory support. Accelerating digital infrastructure adoption requires collaboration, regulatory reform, and consumer engagement through education and talent redistribution.



Learn more about the report I contributed as a researcher.