Recent times have seen a flurry of technology-driven innovation in the financial sector. Non-financial players now offer innovative solutions mirroring and, indeed, extending way beyond services traditionally offered by financial institutions.
Micro-lending schemes, alternative payment systems and peer-to-peer fund transfers are but some of the myriad developments rapidly disrupting traditional financial service offerings. Alongside, we see the rapid advancement of crypto-currencies, wearables and biometric security systems, all in the seeming relentless drive toward a completely digitised global financial system.
Recognising technology’s critical role in the future provision of financial services (“Financial Technologies” or “FinTech”), the Monetary Authority of Singapore (“MAS”) has recently launched the Financial Sector Technology & Innovation (“FSTI”) scheme to support innovation initiatives in the finance industry, i.e. with the ultimate aim of establishing Singapore as a Smart Financial Centre.
Under the scheme, the MAS will set aside SGD225 million, over the next 5 years, for the development of Fintech. According to Ravi Menon, MAS’s managing director, the scheme’s 3 key objectives are:
- to attract financial institutions (“FIs”) to establish their R&D and innovation hubs in Singapore;
- to catalyse FIs to develop innovative solutions promoting growth, efficiency and competitiveness; and
- to support the building of industry-wide technological infrastructure to deliver new, integrated services.
The key areas of interest identified by the MAS align with the current transformative big trends in FinTech, namely:
- digital and mobile payment systems; authentication and biometrics;
- blockchains and distributed ledgers (e.g. Bitcoin)
- cloud computing;
- big data; and
- self-learning machines
Pending specific details of how funds under the FSTI scheme will be allocated, it would appear that projects falling within one of the above areas and satisfying one or more of the core objectives of the scheme should be eligible to apply for funding.
In tandem with the launch of its FSTI scheme, MAS has, on 27 July 2015, also announced the formation of a new internal FinTech & Innovation Group to help formulate regulatory policies and development strategies to support its FinTech initiatives, as well as to source for cutting-edge technologies and innovative solutions with potential application to the financial industry.
FIs and service providers operating in the FinTech space would be well-advised to closely monitor developments in this area to avail themselves of the ensuing opportunities.
Disclaimer: This update is provided to you for general information and should not be relied upon as legal advice.
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