This session will explore the complex regulatory landscape that digital banks face as they strive to innovate and grow. With an increasing shift towards digitalisation in the financial sector, digital banks are emerging as key players in providing accessible, user-friendly financial services. However, they must navigate a range of regulatory challenges designed for traditional banking institutions, including licensing, compliance with capital requirements, anti-money laundering (AML) protocols, and customer protection.

Regulators are concerned with ensuring that digital banks adhere to robust risk management practices, protect consumer interests, and prevent threats such as cyber-attacks, fraud, and money laundering. Regulators must craft policies that maintain financial stability without stifling technological advancements.

Expert panellists will discuss:
\- The most pressing concerns for digital banks, including regulatory uncertainty, data privacy, and the challenge of balancing innovation with compliance.
\- The regulator’s perspective, highlighting their dual responsibility of promoting financial innovation and safeguarding the stability and integrity of the financial system.  
\- How digital banks can work collaboratively with regulators, emphasising the need for clear and adaptable regulations that support innovation while ensuring resilience and security in financial markets.
\- How regulators can oversee compliance but also serve as a partner in fostering an ecosystem where digital banks can innovate responsibly, benefiting consumers and markets alike.
\- Managing systemic risks, ensuring the scalability and sustainability of digital banks, and providing a regulatory framework that aligns with emerging technologies like AI, cloud computing, and cross-border operations.
\- How regulations can be adapted to meet the specific needs of digital banks while protecting consumers and maintaining a level playing field across the industry

Central banks play a crucial role in extending the trust and connectivity of their domestic financial ecosystem with other markets in this rapidly digital world. As businesses and SMEs increasingly venture cross border into new and emerging markets, they will need to have the support of a common digital trust and accessible foreign exchange to seamlessly connect with international parties.
 
An innovative way to build digital trust is through integrated Financial Trust Corridors (FTCs). FTCs not only build trust among financial institutions and businesses, but also sets forth a scalable digital ecosystem that allows for the sharing of common data, utilisation of smart digital assets and democratised access to foreign exchange.
 
In this roundtable, discussants will address the ways in which central banks can lead the development of common digital trust frameworks like FTC that empower local financial institutions and businesses, share about existing FTC work in Asia and Africa, how semi-fungible digital assets can accelerate development, and identify partnership constructs with banks, fintechs, foreign exchange solution providers and private sector entities towards a multilateral trust and FX ecosystems.

It is estimated that about $1 trillion will be spent on capex in the coming years, including significant investments in data centres, chips, other AI infra, and power grid. "Overbuilding things the world doesn't have use for, or is not ready for, typically ends badly," warned a Goldman Sachs report in June 2024.

Sequoia's David Cahn's rule of thumb is that companies in aggregate will need to generate about 4x in revenue (about $600 billion) versus what they spend ($150 billion) on Nvidia data centres. Currently, there isn't sight of such scale revenue.

Besides, most of this spend and commensurate revenue may accrue to big tech and the hyperscalers.

In this challenging environment, how can AI startups expect to capture, defend and grow market share? Which segment does most of the opportunity lie in - the application layer, vertical companies, foundation model providers, or something else altogether?