Key innovation hubs got established firmly and globally – Singapore, New York, London, Berlin, and Hong Kong emerged as centres of choice. These centres attract innovators, talent, and capital, which helps create greater employment and economic growth.
Two key participants of the changing financials services ecosystem, namely Innovators and Investors, engaged actively through this phase, propelling innovation, challenging status quo, and winning early adopters.
Equity investment in FinTechs has raised a compelling $1Tn since 2010 across ~35,000 deals[1], with the majority raised in the past 5 years. Innovators were able to see their solutions mature as adoption continued to widen, helped in no small part by timely regulatory facilitation e.g., through launch of sandboxes, and by creating new-age challengers e.g., issuing of new digital bank licences.
However, not unexpectedly, this exponential growth and adoption of technological innovation, has also introduced new types of risks, both to end-consumers and only in small part, as yet, to the overall stability of the financial system. This, alongside the urgent need to address critical risks like from climate, has caused regulatory challenges.
The next few years are set to be pivotal to our ability to survive, and thrive. Hence, it is now critical that an open, active and direct dialogue begins to take place between investors and policymakers, that channels the innovators’ focus and competencies in areas that matter most.
The Capital Meets Policy Dialogue will enable capital providers to understand and influence regulatory direction, sooner and better. Concurrently, regulators too will be able to understand and supervise new business models sooner. Ultimately, regulators are able to better answer – what, when and how to regulate so that innovation thrives, capital thrives and so does humanity.
