Update on FinTech trends in 2021
25 February 2022
While Singapore was adjusting to the challenges continually posed by the Covid-19 pandemic, regulators have kept at reform and promoting innovation, particularly in the sustainability and central bank digital currency (“CBDC”) space. Relief measures for financial institutions and FinTech firms and workforce which have been impacted by Covid-19 were also extended into 2021.
We are pleased to highlight the following three FinTech trends in Singapore in 2021 in this FinTech Update:
- Regulatory and industry developments: Amendments to the Payment Services Act 2019 (“PS Act”) were passed in Parliament in January 2021 to expand the scope of the PS Act to mitigate money laundering / terrorism financing risks and to empower the Monetary Authority of Singapore (“MAS”) to impose measures on digital payment token service providers. The Bank for International Settlements Innovation Hub and MAS announced the publication of Project Nexus, a proposed blueprint for enhancing global payments network connectivity via multilateral linkages of countries’ national retail payment systems. MAS also launched the second phase of the Singapore Financial Data Exchange (SGFinDex) which allows individuals to view information on their investment holdings as part of their consolidated financial position.
- Encouraging innovation and advancing sustainability: MAS has kick-started various FinTech initiatives to encourage and foster innovation and commitment to sustainability. The National Artificial Intelligence Programme in Finance was launched to build deep artificial intelligence (“AI”) capabilities within Singapore’s financial sector. Also launched was the Asian Institute of Digital Finance, which has begun working on (1) SME Credit Analytics Consortium, a federated AI learning platform for credit assessment of small and medium-sized enterprises, (2) Bottom-up Greenness, a collaboration to develop evidence-based approaches to measure green initiatives in agricultural supply chains, and (3) training of future FinTech Talents with its Master’s and PhD programmes in Digital Financial Technology. MAS also announced the successful conclusion of the first phase of the Veritas Initiative which developed a fairness assessment methodology in credit risk scoring and customer marketing. In the CBDC space, MAS published a paper on the economic considerations of a retail CBDC, conducted the Global CBDC Challenge 2021, concluded a wholesale cross-border payment and settlement experiment using CBDC with Banque de France, and announced its participation in an international collaboration to test the use of CBDCs for international settlement under Project Dunbar. MAS also announced three enhancements to MAS’ FinTech Regulatory Sandbox through Sandbox Plus, aimed at providing more effective one-stop assistance for firms looking to introduce innovative products and services that are regulated by MAS. To address the financial sector’s increasing focus on sustainability, MAS announced four pilot common utility digital platforms under Project Greenprint, and set “Harnessing Technology to Power Green Finance” as the theme for the Global FinTech Hackcelerator 2021.
- Grants and support measures: MAS has committed S$42 million to spur the adoption of technology solutions for risk management and regulatory compliance through a new Regulatory Technology (RegTech) grant scheme and an enhancement of the Digital Acceleration Grant. MAS also extended its training support measures under the IBF-Standards Training Scheme (IBF-STS), Financial Training Scheme (FTS) and Training Allowance Grant.
More information can be found in our FinTech Update.