In 1944, the Bretton Woods Agreement, an American-led system designed to govern monetary relations between participatory states, established the principles for international financial relations and provided the basis of the modern global banking system.

Because of its Western-centric origins, the orthodox financial system operates using the concepts of low-risk vs high-risk territories, pre-supposing that emerging markets carry an inherently higher risk than more economically developed countries. This infrastructure is effectively neocolonialist in its certainty that Western ideals and practices are intrinsically superior and should be exported and enforced onto other peoples and systems. 

Southeast Asia (SEA) has recently witnessed game-changing growth and innovation in banking services. With the World Bank estimating that emerging markets will account for 63 per cent of global trade flows by 2035, this should be an era of unfettered and rapid growth for SEA economies.

However, legacy banking protocols stymy the potential of the markets, rejecting individuals and organisations based purely on geographical and geosocial preconceptions. While 99 per cent of payments within and between parties in US, EU, and UK countries are processed in under two hours, payments into and out of emerging markets are vastly more complex, despite US$6.4 trillion moving annually from these markets.

This Anglocentric financial orthodoxy remains, voluntarily or otherwise, blind to how to measure and adequately identify risk in non-Western markets and defaults to forcing a suboptimal legacy model. Alternatively, it ignores emerging markets entirely, claiming they are ‘too risky’.

Whilst Fintech generally creates fluency and ease of use for Western market users, the fact that such businesses lack custody services of their own means that making a transfer or opening an account is slick for a Western party. Still, the fundamental drawbacks of the system remain when interfacing outside Western markets where the Fintech banking partners are not quite as comfortable.

Adapting to the decentralised nature of Web3

However, the truly global and decentralised nature of Web3 allows for the opportunity of a borderless, unbiased system that will go a long way to abolishing these issues, meaning that risk factors are analysed through raw decentralised data alone, as opposed to within the sphere of existing, institutional presuppositions. 

Currently, financial institutions have in many ways to ‘trust’ a potential client’s representations when they are onboarding, e.g. asking for identity or corporate formation documents and statements of banking history.

In a Web3 environment, there is an environment of permissionless data, which importantly takes trust out of the equation, or at the very least, minimises it. So in a compliance sense, data from third parties about a potential customer takes out the first-person bias and, in many ways, can be treated as a superior data set.

Moving into this way of thinking and operating Web3 technologies can allow Southeast Asian countries to be viewed through a clearer lens by developed market banks on a level playing field by raising the quality of the KYC/AML provided. 

True fiscal inclusion means ridding the infrastructure of geographical, cultural, and racial bias, which we at Tintra are heavily invested in providing. Our unique solution is to build a scalable banking infrastructure with patented machine learning and artificial technology on a full Web3-enabled platform.

Because people’s values, behaviours, and even thought processes are often radically different from one culture to the next, there is no one-size-fits-all solution for understanding each region. ‘Right’ and ‘wrong’ are subjective constructs, and with the rise of Web3, these gaps and, conversely, nuances will diverge to make a more level playing field. Well, at least that is the potential.

The evolution of Web3 marks the beginning of a financial revolution across Southeast Asia, and its potential is boundless. My hope is that it heralds an era of unprecedented growth in fiscal inclusion across the region so that Singapore does not stand alone as the sole global banking destination in the region but acts as the driving force for regional revolution in banking.

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