Pathway 2035 for Financial Innovation - Your Navigator

FIND unveils visionary guide

The collaborative effort behind this paper highlights a fundamental truth: the journey is as important as the destination itself. Only through ongoing dialogue, cross-sectoral collaboration, and the open exchange of knowledge can we collectively meet the challenges and opportunities that lie ahead. Pathway 2035 for Financial Innovation – Your Navigator embodies this spirit of teamwork, uniting academia, industry, and government to shape a brighter future of finance.

Origins and Context

The publication builds upon the foundational ideas presented in the BIS working paper Finternet: The Financial System for the Future, co-authored by A. Carstens and N. Nilekani. This earlier work proposed an interconnected ecosystem of financial services empowering individuals and businesses. FIND expanded on these concepts through critical review and debate with global leaders, culminating in the insights presented in Pathway 2035 for Financial Innovation – Your Navigator, a collaboratively written thesis-discussion paper. This public-private partnership project where government, industry and academia learned from each other and worked together over several months, reflects Switzerland’s thought leadership in integrating traditional finance with cutting-edge technologies while fostering trust and stability across financial systems.

ReDesigning Financial Innovation

The draft version of Pathway 2035 was introduced and discussed during a Thought Leader Session at the ReDesigning Financial Innovation event, hosted by the Embassy of Switzerland in Singapore on 5 November 2024. Insights from this session, gathered from international participants and experts, were subsequently integrated to finalize the publication. The process underscores FIND’s commitment to fostering global collaboration and innovation.

Key Themes and Findings

The guide delves into four transformative themes:

Artificial Intelligence: The Brain of Tomorrow’s Financial System

AI is transforming financial services through greater efficiency, personalization and resilience. Adoption varies around the world: the U.S. prioritizes rapid innovation, the EU emphasizes ethics and accountability and China ensures tight state control.

Swiss-led initiatives like ICAIN (International Computation and AI Network) highlight AI’s potential to democratize resources and align with the UN Sustainable Development Goals. Through global collaboration, AI can unlock unprecedented opportunities for financial institutions and consumers alike.

Digital Assets: A Borderless Economy

Digital assets are revolutionizing how value is stored and transferred, offering continuous access to capital while bypassing traditional barriers. From cryptocurrencies to tokenized assets and Central Bank Digital Currencies (CBDCs), blockchain and other Distributed Ledger Technologies (DLTs) are at the core of these innovations.

However, ecosystem fragmentation remains a challenge. Unified ledger systems, bridging public and private networks, offer scalable and transparent solutions. As decentralized finance (DeFi) expands, robust regulatory frameworks will be essential to fostering trust and innovation.

Digital Trust: A Cornerstone for Financial Interactions

Trust has always been central to financial systems, but in a digital world, it requires new frameworks. Self-sovereign identities (SSIs) and self-custody solutions empower users to securely control their data and assets.

Yet, with cybercrime costs projected to rise significantly by 2028, holistic digital trust frameworks are urgently needed. Financial institutions can reduce vulnerabilities, improve customer engagement, and build confidence through global standards and secure, user-centric approaches.

Quantum-Safe Technologies: Securing the Future

Quantum computing brings both opportunities and risks to the financial sector. While it promises breakthroughs in computation, it also poses threats to current encryption methods, making quantum-safe cryptography essential.

Initiatives like post-quantum standards introduced by National Institute of Standards and Technologies (NIST) in 2024 and projects such as HSBC’s quantum-safe tokenized gold pilot demonstrate how institutions can adapt to quantum challenges without overhauling infrastructure. Preparing for a quantum-powered future requires collaboration and proactive investment.

Acknowledgements and Partnerships

FIND warmly thanks all the authors and contributors to the paper, who are listed in the publication. Special thanks go to Claudia Grisard Barbour, Review Board Member, Institute of International Finance Member and Bretton Woods Committee Individual Member, and Johs. Hoehener, Review Board Member, FIND Innovation Sounding Board Member and Swiss Fintech Influencer of the Year 2024, for their invaluable guidance. The ReDesigning Financial Innovation event was made possible through the support of valuable partners who have realized that by having open and frank dialogues in interdisciplinary and international groups we collectively learn and advance on our individual paths to 2035:

Bridge Builders:

Bank Julius Baer & Co. Ltd., Swisscom AG

Thought Leaders:

Digital Asset (Switzerland) GmbH, Digital Identity and Data Sovereignty (DIDAS), Center for Digital Trust (C4DT, EPFL), Global Legal Entity Identifier Foundation (GLEIF), Luzerner Kantonalbank AG, MME Legal AG, OpenWallet Foundation, OpenWealth Association, QuantumBasel Corp., Sygnum Bank AG, ti&m AG, Unique AG, University of Bern, University of Zurich, ZHAW Zurich University of Applied Sciences

Associates:

CMTA, Lenz & Staehelin, SwissCham Singapore, Zühlke Engineering AG

For any questions regarding the publication or would like to be involved in a future 2nd edition, please contact Eva Selamlar, Head of FIND: info@find.swiss