Banks in Singapore that are used to competing against one another are finding ways to collaborate in the fintech space — under the encouragement of the Monetary Authority of Singapore.
Singapore has “a good judicious balance” between collaboration and competition among local and foreign banks operating in the country, central bank Managing Director Ravi Menon said in an October interview with Bloomberg Television’s Haslinda Amin. While it is good that the banks compete quite “vigorously,” there are occasions where lenders need to collaborate to maximize consumer convenience, he said.
He cited two examples of good collaboration among financial institutions in Singapore: Project Ubin, where the regulator leads eight local and international banks, Singapore Exchange Ltd. and technology companies to experiment with a distributed ledger technology for interbank payments that could lead to more applications. The project involves a number of banks working with technology companies and academic institutions to experiment using the blockchain technology and a central bank digital currency to execute interbank payments without the MAS acting as the central party, Menon said.
Fast And Secure Transfers, or FAST, a real-time 24/7 interbank retail payment system built in 2014 by both international and local lenders in tandem with the MAS. The system allows customers to do almost-immediate transfers of funds in local currency among the participating banks. Only about 20 countries in the world have a similar funds transfer system and Singapore is among the earlier ones, Menon said.
Fintech Strategy Evolving With Technology, Menon Says
Singapore’s vision and strategy for developing financial technology is evolving with rapid technological and industry changes, Monetary Authority of Singapore chief Ravi Menon said, as the regulator prepares for its second FinTech Festival next week.
“What we know now is different from what we knew a year ago” when the MAS held the inaugural festival, Menon told Bloomberg News in an October interview. “So you will see an evolution in our fintech thinking, be it on regulation, be it on data analytics and some of the things that we are doing.”
The financial regulator has been creating new fintech positions within its organization in recent years, as it tries to build its ability to adapt quickly and cement Singapore’s status as a global financial hub. Among the latest appointments: Chief Cyber Security Officer Tan Yeow Seng and Chief Data Officer David Roi Hardoon.
“Movements in technology itself, and adoption, changes in industry structure, all of that is moving pretty much as quickly as we had thought and in some instances even faster than we had thought a year or two ago,” Menon said. “So obviously that will lead to continued adjustment and updating of our approaches.”
The central bank chief said he’ll give an update on the regulator’s latest perspective on fintech at the festival next week.
“We do want to give an update of what we are doing on the fintech agenda,” Menon said. “With the benefit of experience, we can give a more detailed update on where we are — maybe be a bit clearer about the strategies and the vision. But this is really a work in progress. The strategies themselves are evolving — it is not cast in stone.”