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The Monetary Authority of Singapore: keeping up with the Bank

Yesterday I blogged about the flagship lead of the Bank of England to support innovation and create refreshed central bank digital structures.  They are experimenting with everything from a Britcoin to a FinTech Accelerator program, and these operations have filtered through the system into RegTech programs from Project Innovate to the Regulatory Sandbox.

So now I see lots of other people trying to imitate or beat the Bank to lead the FinTech Revolution.  Bear in mind there are competitive positions here about which City becomes the biggest financial centre.  Hence, I’ve just noted that the Reserve Bank of India (RBI) is considering a Rupeecoin on a blockchain; the Bank of Thailand wanting to nurture the Bangkok FinTech scene; and a Regulatory Sandbox being launched in Malaysia.  In fact, the Asian scene is hot, as I blogged last week.

It’s not just Asia though.  There’s lots of FinTech Africa rising and FinTech South America.  For example, the rise of FinTech Mexico, thanks to government focusing on the sector, seems to be leading this continent; whilst FinTech Africa has huge innovation programs bubbling, with most appearing to be recognised in South Africa although Kenya, Nigeria and most sub-Saharan economies have something on the go.  Again, most of the developments are contingent on several factors, as I blogged in April.  Now, the key question is not how to develop a FinTech centre, but how to become THE FinTech Centre.

This is where the major financial centres of the world vie for business and London, New York, Singapore and Hong Kong all near the top of the pile.  That is why I find it intriguing to see what these other centres are doing.

Probably the most similar centre to London and the Bank of England’s approach is Singapore and the Monetary Authority of Singapore’s (MAS) approach.  Last week, MAS released guidelines for investment firms using cloud for outsourced risk management services reports:

The MAS, in its guidelines, said it considers cloud services operated by service providers as a form of outsourcing – and that the types of risks in this regard are not distinct from those associated with other outsourcing arrangements.

The MAS are clearly charge with creating leadership for FinTech in Asia, and this is demonstrated by five other significant moves they have made over the past few years, as summarised by Ong Kai Kiat for the Singapore Business Review:

1. Regulatory sandbox

The regulatory sandbox allows local fintechs to experiment with their new and innovative solutions without the fear of punishment in the case of failure. The current regulations would not apply for a defined period and space for this innovation to be implemented.

This is not a free-for-all. Fintechs would have to justify for their admission to the regulatory sandbox and subject themselves to MAS approval. This sandbox strikes the right balance between maintaining the sterling reputation of Singapore and the need to create the space for disruptive experiments.

2. Singapore FinTech Festival

Innovation is the fusion of different ideas and discipline. Nothing is better at nurturing innovation than to bring a large group of innovators together. The inaugural fintech Singapore festival would last from 14-18 November 2016.

There will be events and conferences for interested parties to meet and interact with each other. Twenty new teams will present their ideas to the wider fintech community. Ambitious web developers in Singapore can take this opportunity to dip their toes in the water. Lastly, MAS will recognise the fintech solutions that are implemented properly with awards.

3. Fintech office

The fintech office brings together multiple government agencies in Singapore. The fintech office will be led by MAS and the National Research Foundation. Other agencies would include the Economic Development Board, Infocomm Investments Pte Ltd, Info-communication Media Development Authority, and SPRING Singapore.

Basically these are all the major government agencies that fintechs will have to interact with in their operations in Singapore. As they are all brought under one roof, whatever requests, improvements, or issues would be heard across the relevant government spectrum.

Time is money. A responsive government would be more attractive for aspiring fintech entrepreneurs to set up base. Existing fintech businesses would also be encouraged to invest time and resources to develop new solutions.

4. Lower requirements for securities crowdfunding

MAS had removed the need to issue prospectus for SMEs that are seeking to raise small amount of capital that is below $5 million within 12 months. Investors will still have to be informed of the risks involved and need to provide their written undertaking.

For securities crowdfunding platform, they do not have to provide a $100,000 deposit and their minimum base capital requirement will be reduced from $250,000 to $50,000. Besides these concessions, the Securities and Futures Act would apply. All these changes are meant to encourage the formation of more securities crowdfunding platform.

5. Australian collaboration

The mature equity market in Australia made it the ideal platform for fintech listing. For instance, home-grown property crowdfunding site CoAssets was listed on the National Stock Exchange of Australia last year.

The MAS had signed an agreement with the local regulator, Australian Securities and Investment Commission (ASIC), to assist fintech firms from both countries to enter into each other’s market. The deal also makes it easy for companies to gain the licenses required to operate in both countries.

It appears that the MAS has a clear view around technology, and already are partnering with London and other centres, as shown above, to gain leadership.

There have also been a couple of other interesting developments this week as they announced the launch of their very own FinTech Awards.  These awards are not just being presented by the MAS however, but in partnership with the  Association of Banks in Singapore (ABS).  The competition will be part of the inaugural Singapore Fintech Festival that will be held from the 14 – 18 November 2016 (10% discount for attendees entering the promotional code ‘FSClub10’ when registering).

As they released this news, the MAS also announced that they had selected 15 leaders from the global fintech community to help the Republic develop its emerging fintech ecosystem. These leaders form the International Technology Advisory Panel (ITAP), who met for the first time on Tuesday.  I’m not one of these guys, but it’s an interesting group:

  • Blythe Masters, CEO, Digital Asset Holding
  • David Gurle, CEO, Symphony
  • Daniel Gallancy, CEO, SolidX
  • Tim Grant, MD, R3
  • Sassan Danesh, CEO, Etrading Software
  • Kurt Vom Scheidt, Global Head, FX, Saxo Bank
  • Michael Stumm, Co-founder, Oanda
  • Pieter Franken, Chief Technology Officer, Monex Securities
  • Vikram Pandit, Chairman and CEO, Orogen Group
  • Robert Wardrop, Executive Director, Cambridge Centre for Alternative Finance
  • Matthias Kroner, CEO, Fidor Bank
  • David Ku, CEO, WeBank
  • Dr Andreas Braun, Head of Global Data and Analytics, Allianz
  • Murli Buluswar, Chief Science Officer, AIG
  • Sabine Vanderlinden MD, Startupbootcamp, Insurtech

As can be seen, all the financial centres of the world are vying for FinTech leadership and the active engagement of government via the central banks are a critical part of this.  Anyone want to tell me what the Fed, ECB, RBI and People’s Bank of China are doing?




About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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