The Banking Academy

Rebuilding trust through shared technology, consistent policy and inclusive investment

Written by Russell Pereira

Aug 05, 2025
7 min

As the global order dissolves faster than it reforms, trust has become the rarest and most essential currency in international finance and technology. Rebuilding that trust requires more than innovation; it demands shared standards, policy clarity and a commitment to cooperation.

The frameworks that once underpinned international finance are breaking down. The global order, once shaped by growth-oriented cooperation, is increasingly fragmented by strategic rivalry and divergent standards. Technological acceleration, demographic shifts and geopolitical tension have created a vacuum in which trust, long the foundation of cross-border finance, has grown fragile.

This disintegration introduces uncertainty across investment, compliance, risk pricing and digital strategy. Institutions no longer operate on a shared map. The absence of standardisation now affects onboarding, digital infrastructure and operational alignment. Trust is no longer a sentiment; it is becoming the architecture on which banking resilience depends. Institutions must operate across fractured systems, where survival rests not on scale but on whether trust can be rebuilt into governance and transaction design.

This fragility stems from the widening gap between technological progress and institutional capacity. While digital ecosystems grow, their benefits remain unevenly distributed. Innovation moves faster than policy can adapt. Trust must now replace scale as the key to coordinated progress.

The global digital divide is deepening institutional inequality

One of the clearest signs of this imbalance is the widening digital divide. John Gong, vice president of research and strategy at the University of International Business and Economics in Israel, described the situation as politically unsustainable. “Factories in China now run 24 hours a day in the dark, fully automated. How can African countries possibly compete with that?” he asked. “If this continues, the gap between advanced and developing economies may become impossible to close.”

Li Jianggan, founder and chief executive officer (CEO) of Momentum Works, observed similar constraints in Vietnam. He noted that while entrepreneurs are talented and ambitious,
“the market is too small, and labour doesn’t scale efficiently.” In his view, even the most capable start-ups struggle to compete with China’s industrial scale.

Gong’s macro view is reinforced by Li’s operational insights. While advanced economies integrate digital capabilities into production and logistics, many emerging markets still contend with inefficiencies and poor infrastructure. “Artificial intelligence (AI) agents have finally found their use case,” Li explained. “That’s why funding is returning, and teams that know how to use them are moving very fast. Those who can apply these tools effectively will keep pulling ahead.”

Technology alone cannot level the playing field. Without shared frameworks, digital divergence accelerates. For banks, this means inconsistent onboarding, fragmented compliance regimes and elevated risk in market entry. Bridging these gaps requires systems designed to connect and interoperate, not just capital or innovation.

Practical interoperability is now the measure of real cooperation

Progress now hinges on alignment of rules, platforms and governance models. T. S. Shankar, Asia representative at the Bankers Association for Finance and Trade (BAFT), emphasised the operational nature of this challenge. “We didn’t change the plugs, we just found a way to make them work together,” he said.

Shankar stressed the importance of institutional alignment that tolerates diversity without losing functionality. “Every society is different. The challenge is finding outcomes that accommodate those differences,” he said. “Policies need to be consistent, fair and easy to understand. If you keep changing the rules every few months, the market builds in risk.” Cities such as Singapore and Dubai illustrate the value of regulatory stability. For banks, these environments reduce compliance burdens and enable more accurate risk forecasting.

Regional partnerships offer a working model of structured trust

Cross-border industrial partnerships show how interoperability works beyond theory. Oliver Oehms, executive director and board member of the German Chamber of Commerce in China – North China, shared examples from the German–Chinese industrial corridor. “German engineering still sets the global benchmark,” he said. “Smart Chinese platforms are working with German manufacturers. Products are designed in Germany, built in China and shipped globally. It’s about combining strengths.”

He added, “We need more small and medium enterprises (SMEs) to join. That will only happen if onboarding is easier. Visa policy, tax procedures and regulations all need to be clearer.” This reinforces Shankar’s point where predictable regulation attracts capital, while fragmented policy deters it.

German firms increasingly seek partners who understand both technical standards and local market context. Banks can facilitate these collaborations by underwriting trusted supply chain relationships and offering structured products aligned with multi-jurisdictional compliance. These mid-scale alliances prove that clarity and interoperability can drive cross-border success even in a fragmented world. Initiatives like the Bank for International Settlements’ Project Nexus offer practical templates for real-time payment connectivity and multilateral financial cooperation.

Regulatory uncertainty is constraining capital’s mobility

Even with economic potential, capital will not move without transparency and predictability. Shankar underscored this with a simple analogy: “If you run a restaurant and serve something different every day, customers stop coming. Countries work the same way. Investors need to know what to expect.”

Banks increasingly face regulatory fragmentation. Where legal frameworks shift frequently, investment becomes speculative rather than strategic. This raises complexity in long-tenor lending, especially for infrastructure or environmental, social and governance (ESG)-linked deals. Volatile jurisdictions demand higher risk premiums and more conservative structuring. As regulatory competition becomes a geopolitical tool, banks must assess not only creditworthiness but also policy stability.

Fragmented AI governance exposes systemic weaknesses

AI governance reflects the same fragmentation visible in trade and capital flows. Where digitalisation revealed broken infrastructure, AI highlights broken consensus. Li warned that regulation is moving faster than its own foundations. “Governments want to appear ahead, so they keep changing the rules. But no one really knows what AI will look like in five years,” he said.

He added that while global platforms shape the policy narrative, innovators in Southeast Asia often operate without access to those discussions. Gong noted that the true risk lies not in the scale of AI, but in the absence of international frameworks to manage its deployment. This introduces operational and legal uncertainty for banks using AI in compliance, lending or customer interaction.

Without harmonised regulation, AI deployment creates uneven exposure across markets. Gaps in oversight can stall innovation or create incentives for risk arbitrage. Banks will need internal governance structures that can function across borders, regardless of regulatory maturity.

Trust must now be treated as institutional infrastructure

Innovation alone cannot build the future. Progress depends on frameworks that allow innovation to scale, be shared and governed. In a fragmented environment, trust becomes the infrastructure that determines whether change leads to resilience or to disorder. It must be rebuilt deliberately through system design.

Digital gaps will not close without standards. Cross-border activity cannot scale without interoperability. Investment cannot grow without clarity. AI cannot be deployed safely without safeguards.

In a world that no longer shares a global blueprint, trust is the infrastructure that must be maintained, codified and scaled deliberately. Trust in finance is a system. Rebuilding that system is the quiet but essential work behind global economic resilience.