Web 3.0 and how this “smart internet” is making our banking faster – Wired PR Lifestyle Story

The word “Web 3.0” has saturated the air at this year’s Singapore FinTech Festival (SFF).

What does it really mean? It refers to the next phase of web evolution that would make the Internet smarter or process information.

How can Web 3.0 or the “smarter internet” benefit consumers?

Well, when it comes to financial services, think about the perfect user experience when it comes to banking or buying insurance. You can also get personalized information about your banking habits.

These functions have been gradually incorporated into our lives.

If you haven’t noticed, try signing up at one of our local banks and they’ll show you your spending habits. Web 3.0 has also enabled faster credit checks to process requests.

Industry experts at Tencent, HSBC, DBS and JPMorgan Chase broke the concept of Web 3.0 at SFF in two roundtables and shared its benefits and risks.

Personalized banking needs, the perfect user experience

Web 3.0 is transforming the way banks interact with customers, according to the speakers.

“If we think about it, it really brings the capabilities of financial institutions to the user wherever they want,” explained Forest Line, Tencent’s corporate vice president and president of Tencent Financial Technology.

HSBC’s Nuno Matos, CEO of Wealth and Personal Banking, gave some real-life examples to justify this. “When we combine the data we have from customer portfolios (investment behaviors, risk appetite) it allows us to provide customers with personalized information individually.”

“Last month in Hong Kong, we offered 22,000 different wealth advisory combinations, customized for each client and what they needed to do to re-create their portfolios,” Nuno said.

Nuno said the bank immediately saw 10 times more interviews with relationships and literacy managers and customers to discuss wealth management.

Faster credit issuance through a data approach

In terms of consumer lending. Nuno said the bank could rely on machine learning to extend credit to an additional 500,000 customers without any documentation or proof of income.

“This is because we get data and are able to spread credit through the use of technology. This offers much more opportunities for customers and they can have much more empowerment. Customers will control their data and decide who they want to share the data with, ”he said.

“How to assign a credit limit in the past? We waited six months to 12 months to assign a limit until we met the customer. Today with machine learning. we are able to do it in a very few days, ”Nuno said.

The HSBC executive also shared that the bank’s ATMs have the ability to learn, which helps them predict the ATM status of each ATM, so machines are never left without money when customers need to withdraw cash.

“These are very good examples of how we use technology to improve the customer experience … Putting transparency and putting the customer at the center of your proposal is what really drives what we do,” he said.

How Web 3.0 solves corporate payments

On the industry side, Panagiostis Georgakopoulos (Takis), head of wholesale payments at JPMorgan Chase, said at a roundtable discussion on wholesale banking that global smarter payment networks for companies have emerged by developing smarter Internet.

“Whether it’s markets or connected cars in the future or connected commercials, all of these things need a more efficient way of moving value. That can happen in a blockchain or not in a blockchain, but it needs a much more efficient way to move money, ”he said.

Takis points out that the real-time payment networks you see around the world are now a step in that direction. But they are still internal and not yet cross-border.

“When you start thinking in favor of the blockchain, I think what we’re doing with Singapore’s DBS and Temasek is really the world’s first blockchain-based multi-currency clearing network, so it’s a great experiment when we start thinking about it. ) in the future “.

Build trust and partnerships that are important for the growth of the industry

Speakers Forest and Nuno emphasize the importance of seeking balance in this growing landscape, which requires building trust with consumers, as financial institutions rely on their data to provide services.

To build trust with consumers, “the most important thing to consider is user protection,” Forest said, acknowledging that Tencent is a fixed service provider, and is still considered new in the industry compared to bank holders.

Forest shared that Tencent practices a number of key guidelines, including telling customers what its business is used for and how to obtain explicit permission from users to share their data.

Decentralized legalization does not want to replace financial institutions, Forest said. “From our point of view. I don’t think this works because financial institutions are the last, you know, because they’ve built that trust over hundreds and thousands of years, and whether you’re in the financial industry, whether it’s payment, investment, or credit. Trust is the key. ”

Nuno acknowledged that banks cannot make technological advances alone.

“Sometimes, and to be realistic, banks and FinTech will work together and we’re seeing a lot of that. We are seeing banks bring FinTech to their value propositions to improve the end customer experience.

“But sometimes we’ll be competitors. and that’s great, because it’s ultimately for the benefit of the consumer … This technology is the driving force behind it all. But technology needs to be with the right people and build trust, and in this world where people are more empowered with their data, in this wiser and more committed world, gaining their trust will make a difference. ”

Government legislation

Tan Su Shan, head of the institutional banking team at DBS, highlighted the growth potential of digital commerce documentation and its benefits.

“If it is believed that governments and different legal systems can digitize electronic documents such as commercial documents, that is, they are placed in a blockchain, immutable and transparent, and can be based on permits so that certain authorities can access them – then it can be trusted. “If you can do that for trade, it will solve a lot of fraud problems in the long run for trade finance. I think the use of international trade is a great case,” he said.

But Tan and Takis agreed that there is still a way to go until everyone adapts to the change.

“Covid-19 has accelerated all of this probably for five or 10 years, but many of our customers still have a long way to go … But I think the technology is reaching a level of maturity,” Takis said.

The important dialogue that financial institutions are currently conducting with regulators is to clarify the rules of these technologies, as well as the need for simplicity and clarity around these rules.

“The current rules make up for the tremendous inefficiency of the system. And the more we simplify, the more we can eliminate this inefficiency and, of course, new technologies can help make everything faster, ”he added.

The future of the bank

The future will feature cross-border payments all over the clock, with low costs, bank veterans said.

“So in five years, I think the blockchain will now allow for a lot of cross-border payments. Right now, some parts work, some parts don’t. So if you have a weekend payment, for example, you might not settle for a couple of days. It’s not 24 / 7. In addition, different countries have different holiday hours, so it’s 24/7 with the blockchain and smart contracts, ”Tan said.

Takis agreed. “Consumer payments will be 24/7, they will be invisible to consumers and they will happen at almost zero cost. At the same time, I think government regulation, for better or worse, is there to stay.”

“So I expect a lot of the same control, especially around wholesale and state payments, not to be very different from today. They may be blockchain-based, but the government will continue to put all the control around them as it is today,” he said.

“I think the regulators, I would say, are a little worried. They see a lot of innovation happening in Asia, both in Singapore, which is generating a lot of dialogue with the European Central Bank in Europe, and of course in the US. But the situation is different, their use cases are different and I think there is a bit of fear to lose but there is still no clear strategy and direction. ”

Tan said it is about finding a middle ground in this growth space of technological innovation.

“He’s trying to find that happy medium – how do you balance the two? Right, short-term and long-term. How you find that happy balance is a huge challenge for everyone. ”

Tan pointed out that insofar as the virtual world cannot have limits, the physical world we live in has its own government and geographical boundaries.

“You know, you have to be physically where those rules and limits are and therefore follow those rules.”

Featured Image Credit: Singapore FinTech Festival