Sunday,14 July 2024

Lord Chris Holmes: “Bridge innovation and resilience for future finance now”

5 min read

By The Asian Banker

Christopher Holmes advocates for balancing financial innovation with resilience, emphasising regulatory sandboxes, AI's transformative role, and the need for adaptive legislation in global banking.

In a memorable keynote speech at The Asian Banker Summit, Lord Christopher Holmes kicked things off with a bit of humour about his lack of financial expertise. He joked: “Having indeed won nine gold medals at the Paralympic Games, it was only after I retired that someone told me that the silver medals were more valuable than the gold medals.” Holmes is a legislator in the UK House of Lords, and a celebrated Paralympion.

Reflecting on his many years of connection with the region, he shared: “I first came here as a 16-year-old to race at the 1988 Seoul Games, and it’s been a pleasure, in the intervening 36 years, to come back for many occasions to many countries across the region.”

Holmes then focused on the key themes of innovation and resilience, outlining five trends that are shaping the future of finance: cryptocurrency and decentralised finance (DeFi), open banking, financial inclusion, electronic trade documents, and artificial intelligence (AI). “I’d like to bridge innovation and resilience and demonstrate that we need both if we’re going to make a success of future finance now,” he explained.

On cryptocurrency and DeFi, Holmes pointed out that the sector is expected to be worth $400 billion globally by 2030. He stressed the importance of cooperation between regulators and businesses, saying: “The way we make a success of crypto and DeFi is if everything is to work together, regulators and businesses need to be working together.”

He also touched on the booming gaming industry, valued at $217 billion, noting: “If you want to talk customer experience, total experience, complete immersion—gaming could not be more an example of an environment to succeed for finance in DeFi.”

Regulatory sandboxes were praised for their role in fostering innovation while maintaining resilience. Highlighting the UK’s success, he said: “The fintech regulatory sandbox was brought into being by the Financial Conduct Authority in the UK in 2016. I was fortunate enough to be involved with that. As a measure of success, it is replicated in well over 50 jurisdictions around the world.”

Open banking was another focal point, presented as a prime example of positive regulatory intervention. It has significantly improved tax collection and financial inclusion. Holmes stated: “Probably, one of the best examples amidst deployment is how we now deploy in the UK, collecting tax and efficient real-time reconciled tax.”

The importance of electronic trade documents was emphasised, with Holmes highlighting their potential to revolutionise international trade by reducing transaction times and costs. “It enables an electronic document, a trade document, to be held in electronic form. It’s the first time that any legislature, not least the UK, has legislated for the opportunities of these new technologies,” he explained.

Finally, he underscored the transformative potential of AI in banking, focusing on its ability to reduce costs and drive innovation. He called for a principles-based, outcomes-focused approach to AI regulation, emphasising the need for explainability, transparency, and public engagement. “When it comes to AI, I would think it’s time to legislate,” he noted.

Lord Holmes concluded with a call to action for all stakeholders—businesses, regulators, legislators, and central banks—to work together in bridging innovation and resilience to shape the future of finance. He encouraged guests to make new connections and engage with the ideas presented, closing with: “For today and for all days from today, our key task is to all play our role in bridging innovation and resilience for future finance now."


Keywords: Resilience, Finance, Open Banking, Financial Inclusion, Electronic Trade Documents, Legislators, Sandbox, Uk Parliament, Blockchain, Digital Finance
Institutions: Hong Kong Monetary Authority, Monetary Authority Of Singapore, Financial Conduct Authority, Prudential Regulation Authority
Country: United Kingdom, Hong Kong
Region: Asia Pacific, EU
People : Lord Christopher Holmes
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