[ad_1]
The advent of the Fourth Industrial Revolution has spurred the development and integration of advanced disruptive technologies both within and across societies, with vast implications that extend from individuals’ daily lives all the way to the sphere of geopolitics. Perhaps nowhere is this phenomenon more striking than in China’s financial sector.Â
The Huawei Intelligent Finance Summit that ran June 3-4 in Shanghai, put on display the many cutting-edge achievements and bold visions that embody China’s revolution in digital finance.Â
The event attracted more than 3,000 global financial industry customers, partners, industry experts, academics and representatives of the news media. Huawei and its partners demonstrated how financial institutions can harness advanced technology to upgrade both industry and services by building an ecosystem that is “agile and intelligent†and transforming themselves into “digital-capable eco-enterprises.â€Â
The company also shared its three strategic initiatives for realizing its vision: “Fully embracing cloud-native technology, diversifying and improving use cases within the industry and aggregating different SaaS products to help financial institutions become better digital enterprises.â€
Fan Gang, professor of economics at Peking University, and vice president of the China Society of Economic Reform, set the stage with his keynote address. “The global pandemic is far from over,†he said. “As the new engine of economic recovery, the most important component of the digital economy is not the production of digital equipment and digital technology itself, but the application of new information technology to transform various industries.â€
Fan was alluding to the integration of disruptive technologies like artificial intelligence, cloud computing, 5G, robotics, and the blockchain, creating the ability to collect, store, and process massive amounts of information on digital interactions with unparalleled speed.Â
Big data has indeed facilitated a shift away from traditional financing structures in favor of new loan and financing mechanisms that rely on aggregated data. Meanwhile, the internet of things has given rise to new ways of analyzing business finance. Today, it’s more useful to examine a food business by using data acquired from Meituan – a digital food order app – than by perusing a company’s quarterly financial summary.
Fan added that Covid-19 had accelerated the trend towards digital platforms and that China’s digital yuan rollout ushers in a new era in the digitization of fiat currency. He explained, “Now when a central bank wants to get information on a transaction, they need to get it through platforms, banks or financial institutions because that’s where the information resides. With digital renminbi, the central bank will have access to such information immediately.â€
“Such information†would aid the central government crackdown on financial crime, improve oversight of the massive shadow banking system, and serve as a tool to stabilize the financial sector. For a country that has for long feared a market collapse due to illiquidity, such control would indeed be a fine prize.Â
Jason Cao, president of Huawei’s Global Financial Services Business Unit, Enterprise BG, Huawei was more pointed in his remarks. “Data is where the value lies. We need to unleash the data,†said Cao.Â
According to the China Banking Industry Service Report 2020 published by the China Banking Association, the number of contactless transactions exceeded 370 billion; the off-counter banking transaction rate reached 90.88%; and scores of other financial services such as personal credit service went online.
Like the central government, Cao understands that the more data collected, the better AI machines work and the greater are the chances of gaining a complete (or near-complete) picture of any given enterprise. Rather than relying on static growth measures such as financial reports, China’s financial sector has come to favor dynamic “surveillance†mechanisms that provide real-time data, such as satellites, smart cameras and sensors.Â
The introduction of such disruptive technologies into the financial sector has facilitated new understandings of an economy – centered no longer on consumers, but rather on “scenarios†such as events, consumption, specific industries and supply chains.Â
Instead of deploying a person to inspect farmland in rural areas that are often difficult to reach, agriculture risk can now be assessed using IOT censored data, agriculture machine sensors, and satellites. Algorithms will be used to tabulate agricultural loans, and maps beamed down from space will assist the government in surveying arable land.Â
China’s financial sector is preparing for a future in which people increasingly communicate with things, and things communicate with things – intelligent things. A world in which your car will take itself to be refueled or serviced, where your fridge will transact with an AI machine that will instruct robots to pack your food and drones to execute delivery.Â
Just as these new mechanisms improve businesses’ ability to access financing, so too do they allow for individuals to more easily receive (micro) loans, pay bills and establish credit history for later requests. Intelligent machines may well emerge at the forefront of wealth management, harnessing people’s personal information to map their profile to investment portfolios.Â
Zhang Yuxin CTO, Cloud BU, Huawei, mentioned that the company’s development of an open data cloud ecosystem is closely aligned with the Communist Party of China’s National Big Data Strategy, as articulated in the 13th-five-year plan, as it “accelerates the open sharing of big data and standardized data resource management.â€Â
The 14 five-year plan released in March of this year complicated Huawei’s efforts to fully comply with Beijing’s requirements. The new blueprint advocated that “data resource transaction security assurances must be achieved.†Zhang noted the contradiction, explaining that “on one hand data openness and sharing is a requirement; on the other hand data protection and privacy must be assured.â€Â
China’s central government intends for big data analytics to have broad applications that span both the government and the country as a whole. Huawei’s latest innovations in these fields are emblematic of the complex private-public nexus characteristic of China’s development practices.Â
China’s “new infrastructure†plan, announced by Premier Li Keqiang at the opening of the National People’s Congress in May of 2020, stipulated that China would “step up†the construction of new types of infrastructure: from 5G bay stations, AI, and the industrial internet to integration infrastructure that augments sophisticated technologies across traditional industries.Â
If successful, this transformation will result in “hundreds of billions of ‘intelligent things’ being connected.â€
Huawei has heeded Beijing’s “new infrastructure†call. At the summit, the company unveiled its all-new Financial Cloud-Network Solution designed to enable financial institutions to build a “stable and high-speed†bimodal architecture. During a panel discussion, Hou Weirong, general manager of the Transaction Banking Department at China Merchants Bank, aptly pointed out that “Huawei is a nationalistic company.â€Â
Huawei now offers prefabricated data center infrastructure embedded with sensors that assist in troubleshooting alerts while also reducing construction time. Intelligent technology is also helping lower the electricity usage of these centers by 8-15%. Such optimization is making data centers greener, aiding the CCP in its efforts to reduce China’s massive carbon footprint.Â
Huawei’s Financial Cloud-Network Solution incorporates sophisticated algorithms allowing for seamless data to transfer, avoiding latency issues that could cause severe disruptions to companies and sectors in the process of transitioning to the cloud. The company’s cloud IDE solution even offers programs that write programs, allowing businesses to minimize labor costs and free engineers to work on other projects.
Notably, banking services will no longer be siloed in separate departments but rather integrated into an ecosystem, affording them increased agility.Â
According to Lui Wen, senior solution expert in Huawei’s Global Financial Services Business Unit, Enterprise BG, “Now we see the shift from fragmented enterprises to the whole supply chain including upstream and downstream…. Now everything is intertwined as a network.â€
These developments will not be restricted to China. Huawei has long been working with partners across the globe to implement many digital financial solutions.Â
M-PESA mobile money from Safaricom in Kenya is but one Huawei-supported venture: a platform much like WeChat that can facilitate myriad payment uses, including merchant paying, salary paying, and other financial services. In 2006, only 26.7% of the country had financial access. By 2018, over 82% of the population was plugged into the financial system. In his keynote speech, Sitoyo Lopokoiyit, CEO of M-PESA attributed this impressive feat to M-PESA’s rollout in 2007.
Huawei doubled down on international cooperation at the Intelligent Finance Summit, launching its Financial Partner Go Global Program. The company said it aims to work with its international partners, to “develop industry-leading solutions, expand the global market and build the FinTech business ecosystem.â€
There is, of course, a caveat. Chinese financial institutions are pushing for their products to be “embedded in partners’ systems,†according to Hou Weirong. Considering the nationalistic character of many a Chinese enterprise, this raises questions regarding what exactly their partners’ data might be used for. After all, China’s National Intelligence Law implemented in 2017 requires that organizations and citizens alike “support, assist and cooperate with the state intelligence work.â€Â
Essentially, the central government can request access to any datasets on national security grounds. This practice is in part what inspired the US to launch a global boycott on Huawei’s 5G rollout, threatening allies to cut security ties if they allowed Beijing to build this infrastructure. America understands that control over the gateway access to the system affords Beijing access to sensitive information as well as the ability to choke the system – this equates to power.Â
Western pundits are all too often inclined to direct their attention towards specific technologies, whether 5G, cloud computing, or facial recognition. Analysts have also zoomed in on China’s digital yuan, speculating about the power of the digital yuan to threaten the dollar’s dominance as the global reserve currency. These assessments are not without their merit, but they all seem to miss the big picture.Â
The Fourth Industrial Revolution is not about individual technologies, however disruptive. Instead, it is about the power inherent in their augmentation. As the Huawei Intelligent Finance Summit demonstrated, the integration of advanced technology is altering cultural practices, reshaping governance, and creating a financial system entirely anew.Â
China has been working hard to position itself at the very core of this emerging phenomenon to ensure the systems’ Sino-centricity.Â
Song Yu, vice president of CCID, felt inclined to declare that “there is no good or bad technology, it really depends on the principles of tech. It depends on the reality of the country.†But this raises a fundamental question; when many countries one day find themselves entangled in this ecosystem, whose reality takes preference?Â
Perhaps this too will be left for intelligent machines to decide.
[ad_2]
Source link
