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The future of finance in emerging markets – A conversation with Richard Banks

21 June 2019

Richard Banks talks about the key themes for The Euromoney Lebanon Conference 2019.

What are the themes to determine the future of finance in emerging markets?

There are four main themes running together to determine the future of finance in emerging markets and the rest of the world over the next five to ten years. It all comes down to the primacy of data. The ubiquitous mobile phone and the Internet of Things (IoT) will enable banks, non-bank institutions and governments to collect an unprecedented amount of data. There is a vast tsunami of information that is coming our way. Combine that with the ability to store that data in a place that is accessible – that’s the cloud, which we’ve already seen happening and that is doing nothing but accelerating – and then overlaying the analysis and interpretation of that data using AI techniques and machine learning. That will enable the fourth part, which is the monetisation of this measurement. We have seen this in industries like media, with Facebook and Google, where they’ve generated a data-centric business model, which is disintermediated and has changed the landscape of advertising and media businesses forever.

This is not what is goingto happen in finance. This is what ishappening, and in some countries, has already happened. This is what is going to drive the financial sectors of the emerging markets for the next five years. It will profoundly influence institutions such as banks, investment banks, fund managers, regulators and policymakers.


Why is all of this important to Lebanon?

These four main trends, in particular the monetisation of data and this data-centricity of finance, are crucial to countries like Lebanon because the world is arguably diverging into two schools: the US model, which is run by the G-MAFIA (Google, Microsoft, Apple, Facebook, IBM and Amazon), and the Chinese model, which is run by Alibaba, Baidu and Tencent. They are completely different models.

If you look at what’s happening in China, Alipay has become the single largest money market fund in the world over the past four years from nothing. The move to digital finance has already happened in China.

How does a small country like Lebanon find a place in that world of giants without losing its sovereignty, its ability to control its financial sector for the benefit of its people, but at the same time provide the cost benefits and the efficiency benefits that a data-centric financial sector brings?

These are the key questions that we will be talking about in Lebanon: What can the incumbents do? What can the Central Bank do? What can the intechs, the disruptors, and the disintermediators that are based in Lebanon or in the region do in the context of these massive global changes?


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