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[Music] good morning very excited to be here let me start by asking all of you question who in the room enjoys their banking experience says a lot we'll have good news the good news is for we are currently going through one of the biggest transformations in financial history the FinTech revolution and it's going to transform banking as we know it what I want to share with you all today is how this FinTech revolution will have winners and losers that it may have a significant impact on a financial center like Hong Kong but that those who will be the most significantly impacted by this FinTech revolution are going to be those who work in the financial industry the bankers of the future will be very different from the bankers today with very different personalities backgrounds and skill sets but first what is FinTech FinTech short for financial technology is the innovative use of technology in the design and delivery of financial services and it's transforming the banking world as we know it things from artificial intelligence peer-to-peer lending big data block chain crowdfunding digital payments and Robo advisors just to name a few but why is this fin tech revolution happening now historically as technology evolved the banking industry was reasonably good I integrating those new technologies in order to better serve customers like yourselves but all of that changed during the financial crisis of 2008 during the financial crisis banks were busy dealing with the numerous new rules regulatory requirements and fines imposed on them punishments day many cases deserve but innovation became a very very distant priority but at the same time some of the most game-changing technological innovations they have transformed the way we live have become part of our everyday life think about the iPhone Airbnb uber whatsup or WeChat for example and what happened was that a gap was created between what your banks were offering you and what you as a customer came to expect especially from a user experience and convenience perspective and that gap is what the fin tech industry is tackling right now but that gap was so big that even non traditional banking players decided to jump in and capture this opportunity mainly technology firms for example did you know that Facebook has currently around 50 different regulatory licenses in the US alone licenses that would allow Facebook users to transfer money by the messenger app Amazon recently experimented with offering student loans off its platform Ali Baba's financial arm and financial launched a money market fund that has become the third biggest money market fund in the world dislodging incumbents who have been doing this for decades that fund has more than hundred fifty million single investors who have an average invested less than one thousand US dollars each for many of them their first investment ever $0.10 messaging app WeChat has become one of the most common tools to transfer money last Chinese near they processed more than 8 billion red envelope transactions the same WeChat app by the way not only allows you to buy insurance products or invest in funds directly from your smartphone but also book your next doctor appointment order a taxi donate to charity and even find a date without ever leaving the app the financial platforms of the future are not going to be your traditional banks but the technology firms my 6 month old baby daughter is probably going to open her first bank account not with an HSBC or a JP Morgan but rather with a Facebook or Apple and these traditional banks obviously worried about these technology firms because they know that many of these tech firms have daily existing touch points with customers like yourselves and to a certain extent they have your trust and confidence if you're comfortable enough to share your kids photos on Facebook wouldn't you use them as well to transfer money to friends and family if you buy all your daily necessities on Amazon or Taobao wouldn't you buy them as well to buy insurance products what also worries the banks is that there are now thousands of new and dynamic FinTech startups that are offering proper products that used to be offered previously by traditional backs peer-to-peer lending platforms now offer consumers an alternative to loans that used to be previously available mainly at banks Robo advisory platforms offer consumers asset management solutions that are not only more transparent in what they charge you but also substantially cheaper and what probably worries the bank's the most is that these newcomers have the ability to pick and choose the parts of banking they want to get involved it obviously the most profitable parts it's very unlikely that you'll see a fin tech startup wanting to become a deposit-taking institution the vault if you want where the assets are held they're very happy to control the front end the consumer facing part and leave the boring back end to the traditional banks things like post rate settlement reconciliation or regulatory reporting and this may create a new banking model the future where the traditional banks are handling the back end basically becoming commoditized utility providers to these technology firms and fin tech startups who control the front end and the customer experience but this fin tech revolution is also bringing a lot of other positive developments one of the most important ones is Financial Inclusion currently in the world we have more than 2 billion people who are completely unbanked these are individuals who have no access to a bank account no way to borrow money for college and for whom the only way to save money is to literally stash it under their mattress it perpetuates a vicious cycle of poverty and by the way this is not only a problem in developing countries but also one in developed countries as well in the US for example in cities like Miami or Detroit more than 20% of households are completely unbanked but there's good news again the good news is for the first time in modern history we are able to offer these individuals with financial services and we're already making a positive difference according to the World Bank over the last five years 700 million people went from being unbanked to being that and this is just the beginning the fin tech industry is continuously working on transforming how financial services are being delivered and consumers like yourselves will be some of the biggest beneficiaries not only from a user experience and convenience perspective but also one of access and cost savings artificial intelligence power chatbots that mimic human conversation and messaging apps are being tested to replace those call centers that you all probably hate biometric data and voice recognition tools are being tested to replace not only passwords but those tokens that you probably hate even more others are connecting FinTech to the Internet of Things and wearable technologies and bedding banking in your day to day life so that in the future you will not even need to worry about it imagine your car insurance premiums automatically going down because your card knows that you have been driving safely and automatically notifies your insurer others are experimenting with a gamification in virtual reality as tools to provide financial services to Millennials in ways they may actually enjoy and that's an important area of focus a recent study showed that more than 70% of Millennials would rather go to the dentist than hear what their banks have to say so obviously the banks are worried about all this but the banks have realized that the landscape is changing and in order to survive they need to evolve some banks will succeed in this evolution and being able to embed this culture of innovation and entrepreneurship across the organization but many will not and this has consequences Citibank estimates that over the next 10 years 30% of banking jobs will disappear some other experts put the number as high as 50 percent one banking job out of two will disappear over the next 10 years well some of you may say hey it's a good thing there'll be less bankers in the world but this has very serious consequences on any financial center including Hong Kong that is at the crossroads of all this because it's not only the direct job losses that turi to 50% but also all the related economy around from law firms and accounting firms to hotels and restaurants yes some new jobs will be created in the FinTech industry but in substantially smaller numbers and these are very different jobs with very different skill sets than those required from those bankers today these are jobs for creative designers and programmers not for traders or compliance officers so what are we to do so many of us in the FinTech community are working not only with government's to formulate new policies or regulators to enact reform but also the broader community in shaping this new ecosystem and ensuring that we can all adapt to this new reality but that's not enough we need a fundamental change and mindset where parents are more comfortable with the idea of their kids joining startups or launching startups rather than taking stable jobs and banks and what I mean parents that includes those tiger moms that we hear about but the most important change is probably the way we train the next generation of talent for example I teach the first FinTech University course in Asia because I fundamentally believe that in 2016 it's it's unacceptable that we let students graduate out of finance programs with no courses on FinTech but we need to go further in that yes we need to continue teaching core courses like economics corporate finance or strategy but we need to embed in the curriculum of every finance program or Business School courses on design thinking coding and product development and this is very important because the bankers of the future and those who will shape the future of this industry are not going to be your traditional bankers but rather designers programmers and creative thinkers thank you [Applause] [Music]