Experts say that the international economic outlook for 2018 is reasonably good. The U.S. and Chinese economies are growing stably while Europe and emerging markets are expected to continue their respective recoveries. Under this scenario, the Taiwanese economy is expected to grow more than 2%. Analysts hope that the Taiwan Stock Exchange can also continue its long-running rally that began last March and stay above 10,000.
In Taiwan, people have mixed feelings about the economy. On the one hand, unemployment did not worsen last year. But problems implementing the government's "One flexible working day, One day off" policy as well as the issue of low wages have affected people's optimism about the economy. Meanwhile, the strong performance of Taiwan equities helped increase the profits of securities firms, futures firms and investment banks as the overall finance sector earned NT$50 billion in profits. However, the banking sector's profits were squeezed last year by a tightening regulatory environment, causing compliance costs to surge, as well as capital requirements. Finally, the banking sector also dealt with a substantial amount of bad debt last year.
There will be many challenges to overcome in 2018. Financial institutions - both public and private - will need to be prepared. For instance, Taiwan will need to manage the rise of fintech, and blockchain technology. Digital finance is changing the nature of the financial services industry, creating new models of direct financing. It is imperative that all players in the financial sector understand this technology and how to apply it here in Taiwan, especially as more experimentation will be permitted within the guidelines set by a regulatory sandbox. Further, anti-money laundering legislation could end up constraining OBU business. Throughout the financial sector, compliance must be optimized.
To do its part to support the modernization of Taiwan's financial sector, the Taiwan Academy of Banking and Finance must evolve. It is imperative that we draw upon diverse types of expertise in our mission.
In 2018, the Taiwan Academy of Banking and Finance will support the financial sector by continuing to cultivate industry talent and advising on financial policy matters. In the past TABF has been recognized for its ability to cultivate financial talent. It has long provided standardized tests for the financial sector and offered numerous training programs for industry professionals. However, given changing dynamics both domestically and globally, the Academy must expand recruitment, and facilitate cooperation among domestic financial professionals, academics and the government. Further, TABF's tests and training programs must transform. They must incorporate advanced teaching methods and interactive elements. The purpose of these changes is to reduce the gap between academia and the business world, upgrade the Academy's course offerings, and cultivate top-tier future talent for our financial industry.
Secondly, given the internationalization of the financial environment and internationalized development of the financial environment and in conjunction with the opportunity to host APABI (Association of Asia-Pacific Banking Organizations) in 2018, the Academy will strengthen its business content and enhance its links with financial institutions. This will serve to support our New Southbound Policy as well as trade with China. At the same time, we will work to help Taiwanese financial institutions better understand how to access opportunities overseas and make use of fintech.
Lastly, the Academy will organize the 2018 Jingye (Elite Business) Award as we strive to develop next-generation business models for Taiwan's financial sector. It is important for society to be aware of the importance of the financial sector and to achieve their financial goals. Further, we will optimize use of digital media as well as our Taiwan Banker platform. It is our goal to prepare Taiwan well for the disruptive changes that the fintech revolution will bring.
In the new year, the Academy will do its utmost to fulfill its responsibilities as a think tank which advises the central government. It will assist the government in drawing up the next stage of its financial development strategy, eliminating societal misundesrstandings about the financial industry, and working to create a brighter future for all Taiwanese people.