 Good day, everyone. My name is Rebecca Blumenstein, and I'm the deputy editor-in-chief of the Wall Street Journal from New York. I'm very happy to be here today and to introduce my distinguished panel. We're here to talk about the disruptive trends that are transforming finance and particularly digital disruption. First, on my right, I'd like to introduce Calvin Chin. He's co-founder and CEO of Transit here in China and has been investing in digital disruptors in the finance sector and beyond. Bunty Bohra, who heads Goldman Sachs's operations in Bangalore, comes to us from there. Alan Rice, who is CEO for SWIFT based in Singapore and heads up Amia in AsiaPak for SWIFT, which handles a stunning 50 to 60 million transactions every day. Okimasamoto, chairman and chief executive of Monax Group from Japan, and you were one of the youngest partners ever named at Goldman Sachs at age 30. 20 years ago, I read in your bio, which is quite impressive. You're talking about the past. And last but not least, V.S. Parthasarathi comes to us from India, where he's head of IT and CEO of Mahindra and Mahindra, which contains no less than 18 separate companies, I'm told. And obviously, India is going through a very interesting time now with the new prime minister. Before we get started, I wanted to just ask you, the audience, a couple of questions to get a sense of where you stand in the digital disruption chain. How many of you have done mobile, have done banking on your mobile phone? Could you please raise your hands if any of you have used a mobile phone for banking? That's pretty, that's pretty impressive. Now, pay is much in the air after the Apple announcement today that they're moving into the pay sector. How many of you have actually used a digital wallet in your transactions? OK, that's interesting. So far, fewer people have used digital wallets. Well, I'd like to open it up to our panelists. Where do you think digital disruption stands from your perch in finance? Calvin, what do you see in China? We have a lot of incumbent banks. We have Alibaba growing very fast. Is this something that's gaining momentum in China? Oh, absolutely. I think disruption in finance, if we can think of emerging markets as a ripe location for leapfrogging and not having legacy infrastructure or technologies, legacy consumer behaviors. I think you see China as a case in point where new technologies, new business models can emerge quickly and rapidly and explode into the new consumer behaviors and create business models and opportunities for all kinds of new and existing market players. I think I would say just kind of in a word what I think maybe as a framework makes China particularly interesting is a large scale market with receptive consumers, tremendous mobile and internet penetration. So the infrastructure and telecommunications infrastructure in place. I would say regulatory openness, despite some of the strictures in traditional finance, you can see characterized by online payments and how that market has developed over time. I know I have more to say about that. But also if you see now bank licensing to Tencent and Alibaba and these dominant players in other sectors and other parts of consumer interactions with commerce. I think we're seeing tremendously exciting new developments where Chinese consumers are quickly and wrap and easily using their phones now using WeChat or an instant messenger client to buy goods, to order food, to pay for the transportation and the taxi. All very new and exciting things that I don't think we see even in Silicon Valley in the US. Bounty, what's the reality of all of this digital innovation on the ground? Sometimes it sounds a little bit easier than it actually is in reality. Yeah, look, there are some big macro observations I would just make and then I'll give one more graphic metaphor for this. Finance in the wholesale sense is an intermediation business and financial intermediation has existed for thousands of years, I mean to one of the oldest professions if you will. And the big, big disruptive element of technology is that disintermediation where people can directly access what otherwise used to be either privity in terms of information, in terms of capital or resources. And so it's a huge democratizing force. But if you took away the context of this technology uplift, if you just looked at the core finance business lines or activities, they're going through their own generational change. Notwithstanding all of the technological disruption, we're going through probably one of the largest up regulations of the ecosystem in, you know, seven or eight decades. Certainly amplified by the fact that it's global, it's not just a US or a US and Western Europe or a post-World War II. This is like a global uplift in the way that regulators, central banks, market infrastructure, intermediaries like ourselves, consumers are all having to change the way they intact tax authorities. All changing the way that they think about the conduits of their business. And at the same time, you have these emerging economies that have an incredibly large demand for much, much bigger financial infrastructure than they already have. But this is where I'll just mention quickly, you know, kind of a reality statement about this. So a few of us last year actually as part of one of the World Economic Forum events, which was the East Asia Summit in Myanmar. I hope some of you were able to tell that. A few of us were able to visit one of the larger banks in Myanmar, one of their main offices and branches. And, you know, Myanmar is a country with 60 million people, natural resources like we've never seen strategically located between India and China with a port. I mean, it's an unbelievable story about a frontier market. But you go to the bank and primarily it seems that their businesses, people bringing in large piles of actual physical cash, having that cash counted and then having that cash stored. We were taken to the credit department and we were shown the loan book. Now, the loan book was actually a book. The book had about 300 or so line entries in it of actual handwritten. We lent this much money to this person and Mrs. this and that will repay on this date at this rate of interest. So on the one hand we talk about disruption, we talk about leapfrog and we talk about all this. But then you have these markets and even in markets that some of us live in where you have sophisticated financial capability, you still have an underserved population. In some cases, and we know that in India specifically, a very, very large underserved population in terms of real access to financial services. So, you know, I hope that I live forever or at least for a long enough time to see some of this, but I'm not sure that I'm not sure it's happening as quickly as we want it to. We hope you live forever too. Thank you. That's very nice of you. Elena Swift, a disruptor or a disruptee in all of us? I think certainly at this point of time, you may know that actually we are one of those stone age animal that has been created by the financial ministry 45 years ago. And the purpose of the institution at the time, which is still today basically is to making sure that fashion transactions can flow seamlessly between different countries, different institutions. And so the same way that blood will be flowing into your veins, right? And that's what we do. Clearly, what we see nowadays, like you mentioned for Myanmar, I can give you multiple examples like Bangladesh or what's happening in Africa and all that. Clearly, banks haven't really evolved fast enough, especially in opening up their technology to ensuring that everyone can play into the same arena in terms of offering services to their own customers, especially retail customers. This being said, we see that this is changing. I think especially when we talk to our clients being our shareholders, we see clearly those people changing their mind and trying to define ways in which it can be actually reinserted into the business, if you like. Initiatives that are taking place, for instance, in Australia, even in Singapore, I'm living where clearly you have seen banks now developing as an industry new payment system that are much more seamless, completely interactive and completely free. And three months ago, the Singapore community introduced a new payment system called FAST. It's literally interactive. You can pay with any sort of device you want to have before you were paying something like 1.5 sync per transaction per payments to day zero. So that tells you also, I mean, that the banks are also reacting to the change that's happening. What I'd like to say also is that one of the main reasons why you have all this new entrance, and you mentioned Alipay, there are many more examples in the world. One of the main reasons is because for many years, and in many instances still today, banks have kept their own IT environment very close. Basically, everything is completely sealed. You don't have access to all this. Some of the banks have, though, I started opening up their own environment through the cloud computing. You have the emergence of APIs that basically enables all the companies to start interacting with bank systems as well. So well so that if you look at the context of Alipay, that's what they've done. Basically, they started working with all the banks, making sure that the payments platform of Alipay is seamlessly interconnecting with all the bank systems as well. So much so that they've started actually adding the value added services that banks today are not capable to do. And the problem that banks are now facing in doing so, if they're not reacting intelligently, is that they will be left alone with the sort of low value kind of service like the end of the day settlement where all the other platforms like Alipay and others will be able to start really working with all the data they have, the payments and all that, to bringing up much more value added services to their community. So there is a real challenge at the same time, I think even for the financial industry, there's still actually a major opportunity to leveraging the position there today. Okay, how is this playing out in Japan, which is kind of the quintessential developed economy in this equation? Well actually in Japan, digital wallet is very, very popular. For example, myself, for the taxi, for trains, for convenience store, I don't use cash. I always use form to pay. So the digital wallet or digital settlement is very, very big in Japan. And I think we are moving into the new era, whereby for example, the even central bank of Japan is now thinking about when you calculate the money supply, those digital cash is not included into the M2 money supply. But now we can't hold it. We have to take all those into account, otherwise we cannot really grasp what's happening in the economy. And also the Japanese government has been very conservative, but the new cabinet and government are very innovative. And they are trying to introduce those digital settlement. Currently it's happening just kind of outside of the nation. Digital settlement is more like a global phenomenon, not like a local phenomenon. But the settlement business has been very important business for banks. And the banks are very important for the nation, because at the end of the day the nation has to use taxpayers' money to save bank. So if the settlement business is going away from the bank, it's kind of a headache for the government I think. So even the Japanese government now is trying to, how do you say, address this issue to understand more about this digital settlement and try to let the bank get involved directly into this digital settlement business. So I think this digital thing is becoming more and more the mainstream thing for the economy. Partha, a lot of action expected in the banking sector in India, yes? Yes. You know Bunty started by saying there is a two-eyed monster here, one where the digital is kind of taking pace so fast that it's leaving everything behind. On the other hand, we have people who are not even included. So inclusion is going to be a very big theme when it comes to financial development in India. And in a sense the Prime Minister just declared that over 800 million people should start having a bank account in the new era. So this is going to be a game where on one side it will be these people trying to catch up and on the other side the digital actually taking great speed. As an IT head and the CFO, you know it's often the deadliest combination in terms of saying where I cannot say that digital and IT doesn't play a great role in finance. So it will always tend to play a very big role and I just wanted to kind of talk about digitization here and how it's going to change the face I believe in the next few years. So I just wanted to differentiate between digitization and digitalization. Digitization is already there in many sense that it does, every transaction gets digitized sooner than later and so will finance transactions. But what we are now talking about is digitalization where you are trying to do not just one transaction but entire ecosystem. And just let me give an example, so if a car meets with an accident, so the car then gives a message to tray that the hospital is going to receive a patient with this kind of medical condition. It's going to inform the insurance company, it's going to ensure the next in kin, if there is another guy involved it's going to tell him what are all the implications for the other person in the accident. And not only that, it's going to even tell his children back at home and his spouse that this is what is happening, keep the checkbook ready because you will have to now deal in terms of some money. And that's the kind of change that we are going to see as we go forward. And this will be in IT language called business movement because we are now going to create value through the movement because we can capture. And I kind of predict that the next war is going to be passed, who owns the business movement and therefore introduce a new term called PVT. We all know what it stands for profit before tax but in future I think it will be known for people, business and things. So it is going to kind of look at a very new term for PVT in future. And the manufacturing industry that I come from says about PPM or parts per million defects but the new world will say people, process and things. So all these terminologies are going to change and as we go forward this digital will stay. And for India where technology is kind of got to catch up in this area, it may actually allow us to leapfrog. So I am watching this world with a great amount of things that digital is going to be the new thing. Africa mobile banking has done a lot more. India is starting to catch up but I hope that soon people will use as Okhi had said that you can use phones to pay for everything in the rural India where now even an account is not being maintained. So it's going to be fun thing. So this concept of 800 million new account holders or banking the unbanked in India, I think maybe we need to expand our idea of what accounts are or banking and unbanked are. If you think about in China where 60% of adults have maybe traditional banking accounts and what's happening on the new platforms. If I started by just making some purchases on Alibaba's Taobao and I had some excess cash on that account and now I've used it to invest into a mutual fund product and then provide credit history that might access alone on the consumer finance side. That's a really interesting new way to onboard financial services customers. Absolutely. That is exactly actually what I wanted to say before. The slow will be the financial industry really adopting these new technologies and getting to the unbanked and eventually offering them the possibility to eventually using the surplus they have in their accounts. Investing them into other financial services, insurance policies or whatever the system that you have. The more you're going to have new entrants like Alipay and others into that space. The question also is that, I think you mentioned this Rebekah before, is that, you mentioned this actually, is that banks have faced over the last three or four years a tsunami of regulations. And that's reality. The other reality is that all these companies, the Alipay, the Alibaba's of all the world, don't yet have to face all these regulations. The more they'll get into this, the more of course, they'll get under the scrutiny of the PBOC in China and the FBI. And I know what it is actually to face FBI regulation in India, believe me, it's not that easy. Because these people are responsible to making sure that the whole financial industry can still work. And that is their responsibility. Can you imagine that there would have been some disruptive technology involved into the days after Lehman went burst? Hopefully at the time, the central banks had put together systems that have been able to sustain the load. If the day after, none of the systems would have been able to work appropriately according to the failure in the adoption principle, there would have been actually any blot into the financial veins. It would have been over. It would have been actually the end of the financial systems. Simple. So hopefully you still have these regulators that are behind there, behind the systems to making sure that the whole system still follows a certain number of rules that ultimately will defend the interests of the users, of the citizens. So I'm with you, but at the same time, all these companies will also start facing the pressure of the regulation. And believe me, one of the key issues that banks are facing today is that I'm supporting this regulation in a way because they help making the financial systems much more sustainable in the future. But the only thing that they, as they have so much to invest to be compliant to all these regulations, they have actually little to invest on new technologies, new services. And that's the main issue that they have as well. So is that really an unfair advantage the new entrants have over the incumbents? And actually there's, you know, more broadly there's a feeling that this disruption is taking hold in the emerging world versus the U.S. and Europe because the banks there are quite frankly under a regulatory burden. I think it's going to happen everywhere. You know, I think we should separate deposit and settlement. And for the government, deposit-taking entity is very important because they have to use taxpayers' money at the end of the day. But settlement is different. So all this, you know, the digital innovation happening is this settlement side. So in that sense, settlement business can be totally away from banks. And I wonder, I didn't read, you know, the article carefully about the iPhone, a new iPhone. Does it have NFC? Yes, it has NFC. You know, Apple will, you know, dominate the settlement. It's easy, at least for the individual retail people, settlement with, you know, smartphone with NFC. Yeah. If you don't, sorry. If you don't look at regulation only from the western world and sometimes Reyes did mention that RBA regulations are in a sense very tough. And I believe this toughness comes from wanting to protect. And in a way, it has protected when the crisis hit that it didn't hit as much India, the financial crisis because of some of these regulations which have been created. So going forward, you know, even as we say, digital world will take by storm the entire industry, the security keeping pace is going to be a key enabler or a detractor. If there are too many frauds which happen before things settle down, everyone may kind of start clamping down on this entire initiative. And it cannot be any more secure security in a passive way. It has to be very much in the active way as transactions are happening. So clearly that part developing is an important enabler to this digital revolution happening, not just for settlement. Like you rightly said, more on the deposit taking side, but also for settlements in a sense that to enable. That's actually, just really quickly on that. I think we can't emphasize Okie's point enough because finance is a term that attracts a lot of different ideas, but all of them are viewed very, very differently by regulators, by participants. So I would use a slightly different terminology, but there's a transactional side which naturally or natively lends itself to the way that people behave now, which is mobile, which is connected, which is user friendly. But then there's capital formation, which is going to have all of the same, in my opinion, legacy baggage that it has forever. Which is that governments are going to care about what money is coming from, where the sourcing of it and what it's being used for. Industry is going to worry about the macro-prudential factors, and of course governments will too, and the systemic risk. Regulators are going to worry about individuals and whether their fiduciary interests are being protected, whether they're being exposed unnecessarily. This isn't new stuff. We've had tulip bulbs and we've had Florida real estate. We've had a lot of different excess moments in time. And as we get this kind of intuitive native transaction world to evolve, like you said, there'll be residual cash left on the phone, and that'll start to become the beginning of financial or capital formation, which will then start to get you in a way into the order world of finance. And by the way, the reason, and I think you wouldn't disagree with this, the reason why it feels like U.S. companies or developed market banks are so burdened isn't just because they're being regulated. It's also because they have large incumbencies that have been there. I mean these banks and these financial institutions and these exchanges and markets are still in motion. So it's the difference between like building a new car and actually trying to change a tire and a moving one. So you would agree that banks like Goldman and U.S. European banks really face a big disadvantage or some strong headwinds? I think disadvantage is a strong term because the implicit in that is that every one of us is in exactly the same businesses or have exactly the same business model. This has always been a very, very segmented industry, and I think that actually technology as a disruptor will allow more specialization, more different participants to enter into the supply chain at the point where it makes the most sense. I mean, taking it away from even finance, it wasn't that long ago where if I was a Silicon Valley technology innovator or entrepreneur, I would have to think about software development in-house. I would have to think about the technology infrastructure. I would have to think about a lot of things and it would cost me millions, maybe tens of millions of dollars. Today I can host it on somebody else's site. I can get somebody else to be the development core for it. There are people who have expertise in the user interface or people who have expertise in the quantitative or the data science side. It doesn't make the industry less robust. It makes it more robust because you have real specialized players in each of those molecular parts of the supply chain. I'm saying one about the future. Don't get me wrong, I'm not the Luddite, but I think that we have to conceptualize the future as not being dominated by institutions that largely look the same, but by lots and lots of entities that look different. You mentioned Africa before and what's happening in Kenya is quite interesting because you have a telecom company, M-Pesa, who is the largest banker in the country. I think 18 billion dollars in transactions last year and the incumbent bank trying to get their way clawing back into this business. How likely is it, do you think, in India and in China and in Myanmar and other places around the world that we could see phone companies? Internet companies, Brazil, just unlikely entrance to the banking business really leaving the industry far behind. If I were to talk about India, I can very clearly see that one thing they have more than anything else is mobiles now. So it's going to be an easy way not just of communicating but of doing many things along with the phone. So it's going to become a central figure and whoever will own a telecom company can come. But I'm also seeing going forward that it's going to be a view of business moments. So whoever is going to conquer that business moment would probably have more of a say because you're just not talking about banks. You're talking about insurance companies as well. You're talking about the city regulations in terms of whether it is the traffic regulations or many things like that. Or how does a fire engine or a fire department and a police department work? So where does it going to kind of have deep impacts is going to be seen. Whether it's telecom company which will have everything or it will be many other people including the people not just the airwaves but are capturing the business moment. Maybe IT companies have an equal chance as well going forward. But telecom certainly has a first mover advantage as they've seen in Africa. But one of the biggest pools of capital in the world is the Japanese post office. So maybe on the transaction side it seems like the movement is one way but the reality and the other side of the equation is still steep in history. And I do believe that governments will interfere into this situation. Even we separate the deposit and settlement. The government does not want to see those people's money to disappear. And we can't just let telecom companies to take care of everything. They will bring in some sort of new regulations I believe. I think it's very fair to say that getting to that space is a very natural investment market for all the telecoms that you have any other place. But the reality also is that they will be only successful if in doing so they'll be capable to start developing and proposing additional services. I think this is one of the success of Alipay with Alibaba is that it is a combination of a sort of super store with a payment system as well. And the two together actually are highly successful because suddenly Alibaba is capable to leverage and to work with all the power of data they are collecting through the payments as well which is fabulous. Now if they don't do that they'll get to failure as well. And yeah we mentioned in PESA as an amazing success of having a telco in Kenya, getting into the payments business, these sort of virtual wallets and payments systems. In a few years grasping something like 50% of the market in the country. But then certainly as they were not really capable to develop in value services they start actually expanding their services or conquering other markets. They try to go to South Africa, major failure. For the simple reason that you mentioned as well because there they've been confronted with other regulations, other practices and laws in the country that made the model completely not practical in that country. So I think the way they will be expanding, the way they will be actually proposing value-added services will define their success or no. But to jump off that a little bit I think the interesting thing in the China market is that the disruptors have their own advantages as well. So you mentioned Alibaba with the kind of integrated solution for the consumer. We chat when they really emerge into holding deposits and distribution of digital wallets had already grown to 300 or 400 million accounts. And so I would say if you think about a disruptor having to over time migrate into a more regulated playing field. Somebody who has that depth of customer relationship and profitability frankly is well positioned to work with the government. And as long as they're creating incremental value for those consumers from a perspective of you know this is a business that 300 or 400 million people want to still see exist. Then I think there's a conversation with regulators that can be actually you know win-win. And I can also build on what you said when it comes to regulators ultimately you mentioned as well that several of time regulators and governments will step into the arena as well. For the simple reasons that they need to protect the interests of the citizens right. And the best example of this is what is happening those days in Bangladesh where they Mr. Brahman the so-called the Green Banker. The Government of the Central Bank has actually got as we force the banks to create a new payment systems a rural payment systems for the people who do not have access to anything with the only difference that the Central Bank will propose its guarantee to those deposits. Which is making a very strong difference to you know what is happening in other countries. So the Central Bank will be there really to protecting the interest of citizens. So you're concerned about risk. Let's tackle that about in some of these countries where there's nontraditional players short of what is happening in Bangladesh. You're worried that some of these nontraditional players could be adding risk to the system particularly if there's a problem and suddenly there's no regulation. There's no rules to really dictate what happens. For me there are clearly risks that belongs to the sphere right which is about protecting the interest of the ones actually that have the deposit and bank accounts and all that. But you have also many other risks that belongs to the way that those services would be proposed to the end customers with the technology that's done behind this. The networking side cyber crime. I mean it's fine to take about you know like we have two hundred and twelve countries in the world and and eleven thousand institutions. But you need to make sure that all of that is actually really secure right and you can read in the press but go every day in the press. You see licking right you see you know every day thirty millions there forty five minutes there that are being big stolen by people that have a speciality especially for coming from some countries to hacking and getting into the system. So if you're not and if you're not proposing a system to the people that are that is really secured from a protectant protections point of view to the people but also from a technology and access point of view. You're going to have some issues. But I would say that regulators. Like an argument of an incumbent though. You know without risk there's no reward right so ultimately I think there may be another obligation for regulators which is are these new technologies are these disruptions net positive for industry. For individuals consumers. And I think if we had the burden of not just protection but of actually creating value then I think we should see you know some risk manage risk that can keep the robust or unfragile system in place but has to let new new opportunities emerge. That I couldn't possibly disagree with that statement but that debate will oscillate. There will be moments in time just like you know financial deregulation derivative deregulation where everybody thinks distribution of risk is great and it's creating engines you know to power economies and leverage is safe because we're much smarter. We have you know great PhDs for MIT working on this stuff and then instantaneously overnight you know it's too big to fail moral hazard banks are too big financial leverage is too concentrated. And it's too it's too concentrated on the one hand it's too distributed on the other hand because we can't find it. So should we mediate the oscillation try to make it smaller than or. I mean look at Adams vibrate since the Big Bang and I think the conversations that are policy driven will vibrate you know just as long as Adams vibrate. So I don't think that there is a way to stabilize that conversation. I think that there'll be some trial and error but I think what I would argue for it and I think there seems to be like at least some part of the room that feels this way. Is it as as these as these interfere interfering technologies or new sticky ways to access financial services transaction start to look more like sources of financial risk financial exposure. That where governments might be expected implicitly to underwrite that risk over time people are going to start paying attention and the moment you have a crisis people are really going to start paying attention. So I don't think that it's impossible to foresee that. Let's give you a contra view. We tried to say whether we should apply for the new banking regulation you know new bank we were to apply for in India. And then we did this calculation saying I have to keep so much money for SLR which is you know keeping money with the government and doing this. And for the next 10 years we probably will make lesser money than we will make as a non NBFC that we are a non banking financial institution. So this is all is happening because of the regulation which wants to protect. If you overlay the regulations to all the people who are holding money and they are as to prescribe to the same thing then the attractiveness that is in terms of financial standpoint will come down dramatically. Then the rubber will actually hit the road and then they will say whether specialization means the game in that era or it is going to be these people who will try to manage both the selling as well as keeping money intact. It's going to be an important factor and I think so far as the regulation is not there and only convenience is there it's fine. But the moment you overlay regulation and they have to manage all that regulation you know which is one of the biggest problems that any bank faces how to manage these regulations and be on the right side always. So I think it's an important consideration. That's a good point. Well you're predicting this fight over regulation and more of it and want to slow things down then. I have a new idea. Maybe the regulators governments may or should let banks do everything. Everything. So far you know the regulators have been very protective protecting banks so that the banks cannot do you know banks cannot do the merchandising or you know gaming those kind of things that banks to do that. To get into gaming. Gaming or you know you know like you know Amazon type of business whatever and the banks have bigger and bigger. Yeah so that's another way to you know somehow balance the situation. So as Amazon brings the fight to the banks then they should bang you know look it's a little late to put new panelists on. But if we had a retailer if we had a telecom company if we had a technology oriented platform representative here my guess I don't know but my guess is that they don't necessarily want to be banks. They're thinking about offering financial services as a way to make their telecom or their device business much more attractive or they're thinking of financial access as a way to power their retail or their merchandise in the same way that. I mean we represent financial entities here I don't think any of us want to necessarily become telecom companies or become you know merchandise even if we had the opportunity. Because again there's a natural skill set or core culture corporate culture and customer base that makes sense for us to you know expand and cultivate but it may not be that smart. I mean just as a for profit enterprise to try to branch too far. It's not only services you know they are so much of a settlement payment going happening in those Amazon or those places and they are paying or their clients are paying lots of fee to banks. So if they take all things fair enough inside then you know they make a lot of money. I think you're identifying the nature of convergence what's happening there. It was once said that there's two ways to make money bundling and unbundling. I'd love to open up this discussion to the audience if any of you have questions. We could go on. Microphone please. Thank you. Anyone want to grab that. I would say. I am a huge believer in cryptocurrencies. Not just for transactions and not necessarily just Bitcoin but I think the invention of the open ledger with the blockchain is fundamentally really technically exciting. And I think whether it is for transaction of value or whether it is for traceability of digital assets. I think this invention is going to in fact in fact and affect financial services not just on the transaction side and the settlement side but also on the capital formation side too. I think you know I do believe that Bitcoin and those kind of things are very good. But again the government will step in. For example you know this is what I think the U.S. government you know the biggest treasury biggest government in the world. They do love greenbacks that are cash. You know why those you know they print money and once those money go to the you know weapon business or drug business wherever those money will never come back to treasure. So it's like a debt equity debt equity swap. Right. So they issue paper as a debt that now it will become equity. So if the digital cash take over the real cash then the U.S. government cannot enjoy those kind of things. Okay. So I believe the government like U.S. government and the big government will step in to somehow stop or you know to those digital cash to become. But so is it stop or regulate. So I think there's an opportunity to regulate this technology as is already happening in many jurisdictions. But I don't think you can stop it. China tried to stop it. Actually 70 percent of transaction volumes in Bitcoin exchange are R&B denominated. So it's not being stopped. So I this is not an area of expertise at all. But if I think in a parallel old fashioned universe where if there's an independent Scotland we don't even know exactly how to think intelligently about what the currency implications are. I mean what does it mean for a currency that doesn't have a nation state or doesn't have a sort of sovereign sponsor. And what what are the implications there. And again it goes back to the same thing that you know when it gets important people start to care when people start to care the discussion really begins. Alan Howard Swift handled Bitcoin. I think I'm very much with with with you on this one. I think from a from a from a design architecture point of view I think the Bitcoin approach whether you call it Bitcoin or something. There will be others by the way. I'm sure using the sort of the same sort of approach to market is a good thing. But again I mean I think that the more you will be spread spread over different markets the more the more regulators governments will start actually influencing this or at least controlling what's being done. But frankly if you look at the way it is done it is a much more efficient way to dealing with currencies than the ones we have today. That's the reality. If you look at it from a from an architectural point of view it's much more efficient. And another irony is you know Bitcoin got a bad reputation because of so growth and illicit activities transacting with Bitcoin. But fundamentally with an open ledger you could have nothing more transparent and traceable. But then from there you'll get to also discussions about that's why governments will step in or regulators because you have all sort of issues around national debt about sovereignty. I mean currency is like the one thing that states have. It's like I have the dollar or the euro whatever but that's something that I have that shows the strength of your of your country or your people. Bitcoin in India. It could be the answer. Yeah in terms of cost what is the cost structure of a Bitcoin like operations versus the hard currency method that we have. And if eventually productivity and the cost of transaction has to be nowhere Bitcoin has a place in the world. And some of these will will go through much as you know problems as you have defined because governments will try to hold. So I think of this not as a general answer to everything but as a niche area which will do in certain areas very well. While government will try to kind of control bits of it which it wants to still have the green bucks and feel the money in the end. So I think that will coexist but there will be a place for something like Bitcoin even in India. Any other questions. Hi. A lot of this conversation around digital currency has been about digital currency as store of value. But I think where the real kind of revolution will be coming from it will not be with these digital currencies as a store of value precisely because of reasons that you gave. But more on the application of the technology which is Kelvin very well pointed out that the open ledger on the blockchain once we start applying it to settlement systems clearing systems. This is I think where we will start seeing a lot of disruption and actually not not for the bad also for for for the better precisely because it can also increase not only efficiency but also transparency of interactions and transactions in financial markets. Any response to that. In Japan is this the district the life you mentioned the wallet expanding. Is that disrupting or is it is it kind of preserving the status quo. It's expanding with a good harmony. Okay. You know it doesn't strike me as a disruptive force. Again you know the the currency is a very big business for the government. We have to remember. So as you said you know as long as it's niche fine but once it becomes too big you know the government will step in. So I think we have to I mean you know I'm not in the government. I'm in the business. I love Bitcoin. I love digital cash. We should we should keep this thing as not too big just convenient and then enjoy the you know the transparency and you know traceability or convenience or whatever. But I think with any new powerful technology there may be a tendency to think of how do we mitigate the risk by keeping it small or keeping it niche. We might have said the same thing about the Internet. And yet these powerful new technologies they have a way of getting beyond our control. You're right. You want to think that I'd like to come to one point that you mentioned in your question is about the port of transparency of the payment system sort of clearing settlements on that. As far as I'm concerned I think what I believe is that there is nothing more transparent than that actually if you look at all the major payment system in the world where it comes to the Fed Fedwire. You go to the ECB your systems you go to the BOG payments all of those actually very much transparent. Actually you're really capable to try to trace any sort of payments that you have in the country. Banks national banks are publishing actually you know amounts of payments you know a number of payments amounts of payments all that every other week. I mean they do that. I have some questions about transparency of the Bitcoin systems those days. I mean that don't believe that they are that much transparent. So I think we'd be careful about what we're talking about because what happened recently with Bitcoin for me is far from being transparent far from being transparent. And also we should we should remember that there are always some some people who don't like transparency. This will continue forever. Right. One thing that we haven't touched on much is is the role of reform. And when you look at Alibaba and Jack Ma said he'd like to stir things up in the financial sector. And one has to think that part of what is happening here in China is that the government is perhaps using Alibaba and other companies to reform the banks. So we've talked a lot about risk but but can governments kind of strategically use these players to force change. A very political question I suppose if you allow me to project intention of the government in this industry. I would say you know from my previous experience in online lending and peer to peer finance the regulators and governments in China is actually very strategic very sophisticated very technically astute. And while I wouldn't say that this would be a weapon or a tool to encourage reform. I think they certainly would see and want to balance the opportunity of letting new entrants force a little bit of change. And so I'm sure they're seeing the cost and benefits and trade offs of it. If not saying hey Jack why don't you come mix things up a little bit. So do you think that will happen in India. Will we see a kind of managed mix of new and old as we bank those 600 million people. If it is one example of how things have transformed in India when you jumped in and started using that as a man of you know livelihood. We're not seeing the big work stations ever and still you know you adapted it the entire ecosystem adapted it new laws came in. I think technology as a way of getting and persuading many people because of the benefit it gives to the entire ecosystem. And government need not be persuaded by applications that we can be persuaded by benefits that it brings in. And I think we all cannot deny the benefits of these things. Eventually yes it will come. But just remember one thing in the financial world which doesn't apply to anything else that you are trading with millions of people's money. And that is where the it is not just about being in the sector. If another US kind of crisis comes in the financial sector and that comes because this kind of regular non-regulated industry. Just look at the kind of you know harm it could do. And that's why the security piece is so important for this to become mainframe. And we need to look at that not as a means of stopping somebody but as a checks and balances which is more appropriate in financial industry than in any other industries. Because you are playing with retail people's money that's that's at the end of the day that's the game. And therefore it's actually how much fast the government can bring security and regulation to manage this. So in a sense government will have to step in eventually but then this is not even regulated. So that's that's the trade off one has to say. Any other questions. Robert Milliner from Australia could I just like you to focus a bit more on the inherent conundrum here and number of speakers have touched on it. About obviously from a user point of view users want to use the full intent of technology and develop this and to make it user friendly and user preferences are global. But money and government's responsibility are country specific. And so I see the large conundrum here is about the whole movement here is around using this to facilitate ease of use and a global ease of use which has a lot to be commended to it. But ultimately responsibilities of government come back to a country defined characteristic. And you can see that in the debate around taxes and the way in which the perception that companies are moving taxes which are the property of their citizens to other countries. And so if you move that risk and we can talk about allocation of risk and keep talking about that for a long time. But ultimately I think as you said our countries will have to make a decision on that. And so the issue here is not so much what's the potential is how do you resolve that conundrum. So anyone want to tackle that. We're still acting locally in many instances. Well I think that I think you did a really elegant job of articulating the two things. I remind some of my colleagues in different contexts that we're never going to hire somebody ever again and likely never get a new client that didn't grow up with the Internet and a mobile phone. So we have to to your point preferences and how people act are increasingly becoming more uniform. But you said acting locally local here by definition starts to become global. Tax authority starts to enforce their perspective and protecting their interests or financial regulator or provincial regulator. And then that can have implications. These are often times are multinational companies or they are more multi jurisdictional in their activities. And then that in of itself creates a global ripple. And I mean we see that with regulators we see that you know the tax authorities and you know maybe it feels a little bit like it's coming from west to east because. The the Genesis of it might be a little crisis driven. Meaning global financial crisis driven. And you're seeing some copycat regulation or up regulation to offset. But I don't think that there's I don't I don't think that those preferences are going to be able to evolve away from the sovereign interest playing a big big role because the sovereign interest or that's the title pattern. That's the ocean moving up and down in the direction of the current. You know the rest of it is we're just tacking along in the wind to some extent. So I don't have an answer for you but I think that that kind of room is very vivid right now and getting more so. Alan isn't swift. Attempt to do just that to globalize. But clearly I mean I think your point is very right. I mean what we see today and being a operation actually in two hundred and twelve countries in the world is that every single country has its own set of regulations laws and all that. And the reality is that most of the case the different even when it gets actually to the European community where you have 27 countries and 18 on the Eurozone. Yes they still have they have the sort of European regulation in addition actually to the still the national jurisdictions and laws as well. But we shouldn't also forget that above and beyond this you have also countries that have no extra territorial legislation like the U.S. So you need to make sure that you know when you're a bank or when you are a financial supplier that you not only comply to every single jurisdiction where you have local operations. But also in addition to that the one that somewhere I mean she's superseding all the other ones and that makes actually the real difficulties and the challenge for all the players. And I would suspect that the more again I'm coming back to that example and I pay or other players will go abroad will start really developing the international business the more they will have they will be confronted that as well. You know I can imagine right perhaps like a sort of five years down the road scenario but you know the Apple stuff right they start actually proposing payment services in all the countries. Certainly American citizens that today do not want to be part of reporting to the American administration like you have an increasing number of them in those countries they're making payments through Apple. Apple pay goes straight to the U.S. Then you know the the American administration has a view on this and God knows what's going to happen. So you know transparency is going to be critical into that as well. And the other side of that which is privacy and privacy. Any other questions before we wrap up. I want to ask about the relation between financial sector and the industrial companies. So are you recruiting more people from those industrial companies who have rich experience in his specific industry. Not only financial bankers and the second is I do feel that the financial sector and industrial companies are merged together closely than before. Thank you. Well 80 percent of new hires of my company globally engineers. So I think you know by the way the number of engineers are really drying up in the states really drying up. I mean China is very clever producing many many engineers. So I think to produce engineers are going to be very important for for for the nation. I'm answering your question. I think you know those engineering and the finance are getting very very close to each other. Before we wrap up I'd love to just go around the circle and see what your predictions might be for for how this will end up in the next three to five years. More inclusion is a word that I can hear not just of more people participating but also technology participating in the game. That's that's how I see it going with the government slowly using security as a mean of comforting themselves but operating in issues. This is how I see the world going in the next three to five years. I think it will change definitely. But when you think about the vested interest around this currency settlement I think it has to move slow. It will move slowly compared to other innovations. Not as fast as one might think. I'm pretty sure that of course I mean technology will keep evolving faster than ever and will keep accelerating again and again. I think the financial industry will have to keep adapting to that. But I'm with you as well. I mean once you're going to have many more people the unbanked getting to you know getting banked banked and all that there will be there will be a lot more interest in national interest. You know getting involved into into the definition of the future of that industry. Yeah well I guess it's appropriate Calvin gets the last word. You don't want to end on a grumpy grumpy note like me but you know I'll borrow some I'll borrow some words from smarter and more thoughtful people than me. And William Gibson the famous futurist author kind of saw the Internet in some ways. He said and I think it was something along the lines of the future is here. It's just not evenly distributed. I think that it's that inevitability that you know we're seeing tomorrow today. But that doesn't mean we're seeing tomorrow everywhere today because in a lot of places we have any we can barely see yesterday. But you know one of my favorite thought leaders on this topic is on all topics is Mark Twain. And he said you know history never repeats itself but it rhymes. And so you know while the future might be here and is working its way through the distribution you know we shouldn't assume that the history will have no resemblance to the past. Calvin I'd echo a lot of the comments I think over the next five years we definitely will see up regulation and some slowing of the emergence and say a distribution. However unevenly of some of these new exciting technologies I would say inclusion is a really exciting topic from the umbang from the say base of the pyramid. But just to end on another maybe lighter note one aspect of inclusion we haven't had yet is artificial intelligence. And I think one of the exciting aspects of cryptocurrency is machine to machine transaction. And I think that's something we're going to see emerge over the next few years too. With that please join me in thanking the panelists for a fascinating discussion. Thank you.