The Monetary Authority of Singapore (MAS) outlined its plans to support the digitalization recommendations put forth by the Committee on the Future Economy (CFE) to help prepare the financial sector for the future.
MAS will facilitate infrastructure projects aimed at driving innovation, enhancing market efficiency, improving customer service, and strengthening Singapore’s regional connectivity. Key projects include:
Electronic Marketplace for Trade Finance Assets
An electronic trade finance platform will allow participating banks to distribute trade finance assets globally, free up capital for new trade finance loans, and increase the availability of trade finance within the region. A local fintech company with international experience in trade finance is developing such a platform with funding from the Financial Sector Development Fund and expects to launch in the coming months, according to MAS.
Electronic Trading Platforms for Foreign Exchange (FX)
MAS is collaborating with banks to establish e-FX trading platforms that can enhance price discovery and FX trade execution, particularly for Asian currencies. This initiative will provide market participants with improved liquidity and efficiency in FX transactions, strengthening Singapore’s position as a leading FX hub in Asia, stated MAS.
Data Infrastructure for Natural Catastrophe and Cyber Risk Insurance The Natural Catastrophe Data Analytics Exchange aims to broaden the accessibility of high-quality data on catastrophes in Asia. This will be achieved by pooling industry loss data and gathering economic data through remote sensing technologies. The enhanced data will help increase catastrophe insurance coverage within the region.
The Cyber Risk Management Project focuses on creating industry-wide definitions, databases, and models for cyber risks to improve their quantification. This effort will contribute to the growth of cyber risk insurance in Singapore and throughout Asia.
Exploring the Feasibility of an Industry Know-Your-Customer (KYC) Utility KYC, the process of financial institutions verifying their clients’ identities, has become costly and resource-intensive. This process often creates inefficiencies, requiring customers to undergo repetitive KYC procedures and provide the same information to different institutions.
To address this, MAS is working with the industry and government agencies to assess the feasibility of a centralized KYC utility. This utility would allow participating financial institutions to utilize government-registered information based on client consent, simplifying KYC processes, reducing the compliance burden, and improving efficiency.
Infrastructure for the Widespread Use of Electronic Payments MAS has been actively promoting the use of electronic payments to increase convenience for consumers and productivity for businesses. Singapore already possesses a robust payment infrastructure through Fast and Secure Transfers (FAST), which enables secure real-time interbank payments. In the third quarter of this year, the banking industry will introduce a Central Addressing Scheme. This scheme will allow FAST transfers using proxies like mobile numbers and national identity numbers instead of bank account numbers.
Given the increasing popularity of QR code payments, MAS is also collaborating with the industry to establish interoperable standards for such transactions.
“The fundamental goal of MAS’ initiatives is to foster a supportive environment for innovation, which is crucial for the future of financial services,” said Ravi Menon, Managing Director of MAS. “We achieve this through a balanced regulatory framework and enabling technology infrastructure. While encouraging risk-taking, we remain committed to safeguarding the stability of financial institutions and the financial system as a whole.”
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