A $225 MILLION initiative to help financial firms set up innovation labs and to fund infrastructure to deliver financial technology (fintech) services was announced yesterday.
The Financial Sector Technology & Innovation (FSTI) scheme is one of several programmes aimed at establishing Singapore as a smart financial centre, which in turn is part of the Government's "smart nation" initiative, said Mr Ravi Menon, managing director of the Monetary Authority of Singapore (MAS) yesterday.
Mr Menon told the Global Technology Law conference that the MAS will develop a regulatory approach that strengthens the industry's cyber security as well as devising initiatives to support the adoption of new technologies. These include developing efficient digital payments systems and regulatory reporting and smart surveillance systems.
Metlife and Swiss bank UBS have applied to tap FSTI funds to set up innovation labs, although other institutions have already established innovation centres on their own.
Other FSTI-supported projects will include a decentralised record-keeping system that prevents duplicate invoicing in trade finance, a cyber-risk test-bed and a natural catastrophe data analytics exchange.
Mr Menon also noted that digital and mobile payments, authentication and biometrics, cloud computing and learning machines could transform the finance industry.
High Court Justice Lee Seiu Kin said at the event that the law needs to evolve alongside technological developments to prevent rogue practices and disrupt technology-enabled crime in the financial sector.
"The convergence of technology and finance has reinvented the landscape of the financial sector," he said. "Electronic commerce has been indubitably improved by the proliferation of convenient payment solutions such as PayPal and credit cards. The rise of virtual currencies such as bitcoin has provided a refreshing take on traditional exchanges of value.
"These technological creations have brought with them complex regulatory challenges since they could easily be turned into vehicles for criminal conduct. For instance, the use of bitcoin with anonymisation services could provide the necessary anonymity for criminal syndicates to operate undetected."
Mr Menon agreed that several areas need improvement.
"As more financial services are delivered over the Internet, the frequency, scale and complexity of cyber attacks on financial institutions have increased globally. Hackers and cyber criminals are constantly probing IT systems for weaknesses to exploit," he said.
A new wave of next-generation cyber security solutions is emerging, including trusted computing, security analytics, threat intelligence and active breach detection.
Mr Menon noted that as more stores and restaurants introduce self-checkout facilities to improve productivity, there is a need to promote greater adoption of new payment technologies, including electronic direct debit authorisation and fund transfers using mobile numbers or social networks.
There is also a need to develop a unified point-of-sale mobile terminal system.
Preparing for changes on jobs and skills is critical as technology will "make obsolete many jobs in the financial sectors, but also create new ones", added Mr Menon.
The MAS will work with the industry, the Institute of Banking and Finance, training providers and universities and polytechnics, and also provide funding to financial institutions and support training opportunities.
WHAT'S TO COME
A regulatory approach that strengthens the industry's cyber security
Initiatives that support the adoption of new technologies. These include developing efficient digital payments systems and regulatory reporting and smart surveillance systems.
This article was first published on Jun 30, 2015.
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