The Monetary Authority of Singapore, which announced plans to turn Singapore into a “Smart Financial Center” earlier this year, has formed in late-July the Financial Centre Advisory Panel (FCAP).
Composed of 26 leaders from the banking, insurance and asset management industries, the panel should strengthen the dialogue and partnership between the central bank and the financial industry, and help drive the growth and development of Singapore’s financial center.
On August 25, the FCAP held its inaugural meeting and discussed strategies to grow the city-state’s financial center, promote innovation and the use of technology, and build deep skills and capabilities, MAS said in a release.
Firstly, the members suggested creating an open banking platform via APIs to “unlock faster innovation in financial services.”
Secondly, the panel suggested creating “sandboxes,” or safe places where innovative products and services would be experimented and rolled out “within controlled boundaries.”
Sandboxes were already announced by Menon in June. Speaking at the Global Technology Law Conference, the managing director said that MAS’ plan was to foster an innovation sandbox approach to regulating fintech startup.
“The intention is to create a safe space for innovation, within which the consequences of failure can be contained. [Financial institutions] can seek MAS’ guidance and concurrence on the boundary conditions – for example, the time period, customer protection requirements, etc.”
Others have encouraged such initiatives. Steven Tong, the managing director of Startupbootcamp Fintech Singapore, expressed excitement in the sandbox approach. In an interview with Deal Street Asia, Tong said:
“[MAS is] going to provide a sandbox to test out ideas. This is more impactful than the fund, as the banks don’t really need money but they’re really concerned about regulatory impact to the business. Having a sandbox or something equivalent to encourage experimentation is much better than pure financial incentives alone.”
A possbile conclusion can also be that Fintech Sandbox will open the doors in Singapore and partnering with MAS.
FinTech Sandbox is a US-based nonprofit that helps FinTech startups around the world to build great products and applications. They provide free access to financial data from the world’s largest data providers as part of a 6-month program.
Menon said that MAS will commit S$225 million in funding over the next five years to provide support for the creation of “a vibrant ecosystem for innovation” in the financial services industry.
The fund will be dedicated to building innovation centers and support institution-level and industry-wide projects.
In addition to the sandboxes initiative, the FCAP suggested to explore possible applications of blockchain technology and distributed ledgers, notably to “facilitate price discovery and smart contracts.”
The members also advised more timely and proactive sharing of cyber intelligence among financial institutions “to strengthen situational awareness and build cyber resilience.”
Menon, who chaired the meeting, said the discussion was very fruitful. “It was an engaging meeting, with lots of good ideas and useful insights,” he said. “This is a strength – that our industry leaders can come together and discuss candidly and constructively what we can do together to grow the financial center.”
MAS’ FCAP plans to meet biannually. The next meeting is set to be held in January 2016.