South East Asia's digital economy was worth USD31 billion in 2015, and is forecast to grow to USD200 billion by 20251 (see Editor's notes for more details).
However, John Hsu, Chief Information Officer for HSBC Asia Pacific said that further cooperation in supervisory and regulatory approaches across the bloc is needed to ensure Southeast Asian economies stand to fully benefit from this flourishing digital economy.
"While technology is inherently borderless, the regulation governing it is not. This can create challengs for global businesses operating global technology estates. The best way to manage this is by governments, regulatory authorities and businesses working together through regional cooperation."
Over the next 10 years, there are some essential issues that will be at the heart of this transformation including data localisation, cloud computing, AI and cybersecurity 2
During the speech3, HSBC outlined four recommendations for how a more collaborative and dynamic relationship between firms, governments and regulators can be built.
Holistic Regulation: To preserve the integrity of the global financial system, it is crucial that an appropriate regulatory framework is developed for all companies irrespective of their business model.
Activities-Based: A two-tier regulatory regime must be avoided to reduce the risk of regulatory arbitrage. Providing the same services with the same risks must mean that the same rules apply, from prudential and conduct to consumer and data protection.
Regional coordination: ASEAN policymakers should consider the roadmap ahead for effective implementation of the ICT Masterplan 2020, the DIFAP, and the Framework on Digital Data Governance; as well as the institutional processes required to support these objectives. Doing so will strengthen ASEAN's credibility as a production base of choice for global businesses.
Global standards: There should be global coordination in these areas wherever possible. We encourage financial service regulators, data protection and competition authorities, national governments, supranational bodies and industry to work together in global forums towards more harmonised requirements.
Mr Hsu continued: "Policymakers should consider how they can create a coordinated regulatory regime where all sizes and types of companies are able to innovate at pace and regulators have sufficient oversight and enforcement capabilities."