Bank of Japan: Fintech the future for financial services
24 August 2016 Tokyo
Image: Shutterstock
Blockchain and artificial intelligence (AI) are likely to play a large part in financial services in the future, according to the governor of the Bank of Japan.
Speaking at the central bank’s Fintech Forum, Haruhiko Kuroda suggested that much of financial services is essentially information processes, and therefore is closely linked to information technology in general.
He said: “Payments, settlements, investment judgement and risk management, which constitute the core of financial activities, can be regarded as information processing. Therefore, progress in information technology and AI can be expected to significantly influence them.”
Kuroda added that blockchain, or distributed ledger, technologies “challenge the conventional concepts of ledgers kept by a trusted third party in a centralised manner”.
He said that, historically, development of financial services has been supported by a basic ledger-based infrastructure, adding: “The dramatic changes in how ledgers are kept may have the potential of significantly changing the structure of financial services.”
Kuroda also drew attention to the importance of considering information security amid the innovative landscape, saying the development of technology has “simultaneously refined the tactics of hackers and cyber-attacks”.
He said: “For the sound development of fintech, information security is a key.”
Although more openness of networks allows for better access to financial services and improves services for customers, it also means that “potential target points for cyber attacks tend to increase”.
However, he also noted that fintech development can, and should, actually contribute to the security of financial transactions.
He said: “It is critical for relevant parties to make utmost efforts to use technological innovation for enhancing security in financial transactions.”
“Fintech will thrive and grow when users associate it not only with convenience but also with safety and trust.”
Speaking at the central bank’s Fintech Forum, Haruhiko Kuroda suggested that much of financial services is essentially information processes, and therefore is closely linked to information technology in general.
He said: “Payments, settlements, investment judgement and risk management, which constitute the core of financial activities, can be regarded as information processing. Therefore, progress in information technology and AI can be expected to significantly influence them.”
Kuroda added that blockchain, or distributed ledger, technologies “challenge the conventional concepts of ledgers kept by a trusted third party in a centralised manner”.
He said that, historically, development of financial services has been supported by a basic ledger-based infrastructure, adding: “The dramatic changes in how ledgers are kept may have the potential of significantly changing the structure of financial services.”
Kuroda also drew attention to the importance of considering information security amid the innovative landscape, saying the development of technology has “simultaneously refined the tactics of hackers and cyber-attacks”.
He said: “For the sound development of fintech, information security is a key.”
Although more openness of networks allows for better access to financial services and improves services for customers, it also means that “potential target points for cyber attacks tend to increase”.
However, he also noted that fintech development can, and should, actually contribute to the security of financial transactions.
He said: “It is critical for relevant parties to make utmost efforts to use technological innovation for enhancing security in financial transactions.”
“Fintech will thrive and grow when users associate it not only with convenience but also with safety and trust.”
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