In a speech delivered today at the China Development Forum in Beijing, Ajay Banga, President and CEO of MasterCard, shared his views on how innovation can help drive economic growth. Banga noted that China’s current wave of industrialisation – which has resulted in unprecedented growth based on low-cost labor – is challenged and the country needs a new model centered around continuous innovation.
“China needs to focus on the right areas to enhance its innovation ecosystem – an effort which will be instrumental in advancing China’s Small and Medium Enterprise (SME) segment,” said Banga.
Banga recommended four key imperatives in order for China to move forward in creating an economic environment more favourable for SMEs and future growth:
- Create a more level playing field for SMEs by removing the significant structural advantages that State-Owned Enterprises have over SMEs;
- Reform the interest rate regime, so that China’s banks will increase their focus on SME lending in order to preserve good interest margins;
- Harness a local banking model with right mix of global banks, large national banks and smaller regional / local banks to create efficiency in financing and serving SMEs; and
- Develop Electronic Payment Innovations that meet SMEs’ unique needs.
There are increasing calls for the use of open banking APIs from industry groups and even the UK Treasury. It is clear that this market shift is inevitable, but while this openness will facilitate innovation and drive competition, there is uncertainty.
The European Banking Authority (EBA) has published the long-awaited draft of the Regulatory Technical Standards (RTS) covering Secure Customer Authentication (SCA) and secure communication. Tom Hay, head of payments at Icon Solutions shares his thoughts on whether they will be effective.
In another big deal for the global payments industry this week, credit card firm Visa has inked a partnership with digital payments processor PayPal.
The five fintech startups joining credit card company’s Capital One’s new fintech accelerator in Nottingham have been named, including Credit Kudos, Multisense, Pariti, Warwick Analytics and WealRo.