- Global firms pivoting to finance green technology and carbon neutral business strategies
- Cash is Disappearing – VISA
- Ecommerce growing by 30 per cent year on year in SE Asia
- 114 countries worldwide today are exploring digital currency
- “Attractive opportunities for private equity – in financial services, healthcare and technology particularly, AI.” – Carlyle Group Co-Founder David Rubinstein
RIYADH, Saudi Arabia – Accelerating digital innovation and investing in green technology are fundamental pillars of sector growth that will help drive global economic growth and diversification over the coming decade. This was the clear message to 3000 participants from the global financial community attending the Financial Sector Conference (FSC 2023) in Riyadh under the theme of “Promising Financial Prospects.”
The digital transformation of the financial services is continuing at a rapid pace and especially in the area of payments system where using cash is rapidly becoming a thing of the past all over the world and expanding in parallel with the broader FinTech sector.
Meanwhile global financial institutions are rapidly pivoting their investment strategies to reflect the need to finance projects that are investing in new renewable energy or carbon neutral business strategies that are aligned with global trends towards Net Zero.
Andrew Torre, Regional President, CEMEA for VISA, told a panel discussion on shaping the future of digital payments: “Cash is disappearing. Payments have increasingly become digital. In 2019, 65% of transactions on VISA cards were cash. In three short years, in 2022, it’s now at 48%. In the Kingdom, in 2017, about 17% of transactions were contactless, now its 96%.”
Reflecting the global nature of the Aung Kyaw Moe, Founder & CEO, 2C2P from Singapore said: “Ecommerce in Southeast Asia is a necessity, it’s not just a luxury and here Ecommerce has been growing year-on-year by 30% and the pandemic increased that growth even further.”
Mohsen Alzahrani, Program Director, VA and CBDC Saudi Central Bank (SAMA), outlined how the world is looking at a cashless future with the introduction of a digital currency. He said: “At the end of 2022, 114 countries, representing over 95 percent of global GDP, were exploring a Central Bank Digital Currency solution with 11 countries having fully launched a digital currency.”
One of the leading global financial figures participating at FSC 2023 was David Rubinstein, the Co-Founder and Co-Chairman of the Carlyle Group. In a discussion on private equity he said: “It is more challenging to raise money today and more challenging to get the money invested but I still believe private equity firms are in pretty good shape. Private equity, compared to 10, 20 or 30 years ago, has really grown dramatically because rates of return have been very good. Today, there are lot of attractive opportunities – in financial services, healthcare and technology particularly, AI.”
A major global issue, and especially in the developing world, is how to effectively pivot towards greening the economy. Akihiko Nishio – Vice President, Development Finance, The World Bank, told conference delegates: “It is hard to make the pivot especially for poor and low-income countries which are least served by infrastructure and appropriate regulatory systems and there are formidable constraints to be surmounted. For example, in Africa up to 40 per cent of the population have no access to the internet.
“But in terms of effective financing this is a global issue that impacts donor countries as well as developing nations. That means we all need to talk collaboratively across country borders and reach a global consensus and sense of solidarity that all these issues related to climate change need to be tackled as a matter of urgency for the global public good.”
Discussing their strategy for investing in the green economy, Sjoerd Lennart, Global Head Corporate Banking, JP Morgan said: “We cannot make the transition too quickly as the world needs energy and traditional sources still play an important role. But it is clear that transitioning is needed and we need to help our clients finance that and move to a greener profile. With our new clients we now use a carbon assessment tool before we engage to see if we want to be involved with their investment.”
Jad Ellawn, Managing Partner and Regional Head, Brookfield Middle East, added: “We raised the world’s largest global transition fund and we look at it as a continuing process as we continue to invest in green energy but also look at business transformation. In order to reach Net Zero we need to go to where the emissions are and look at means for carbon capture for example.”
FSC 2023 is being organized by the Ministry of Finance, Saudi Central Bank, and Capital Market Authority – who are key partners in the Kingdom’s Financial Sector Development Program, a key cornerstone of Saudi Arabia’s Vision 2030.