SINGAPORE (Nov 11): The Edge Singapore is honoured to be the official media partner of the Singapore FinTech Festival for the third consecutive year. SFF2018 was already the world’s largest fintech festival; SFFxSWITCH 2019 (Singapore Week of Innovation and TeCHnology) promises to be bigger and better. It will showcase use cases of exciting new technology such as blockchain/distributed ledger technology, artificial intelligence (AI) and new forms of data analytics.

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In the past 55 years, Singapore has transformed from a colonial backwater into a shipping, transhipment and air hub, and a financial centre. In our Cover Story, Jacqueline Loh, deputy managing director of Monetary Authority of Singapore (MAS), outlines its next phase as a fintech hub.

SFFxSWITCH with its MATCH (Meet Asean’s Talents and Champions) platform and Deal Fridays will bring new investments into Singapore, boosting the city state’s position as an asset management hub. As a fintech hub, Singapore will continue to encourage innovation and new technologies including blockchain to improve financial services, making trade finance and cross-border payments faster and cheaper.

This year, SFFxSWITCH, to be held from Nov 11 to 15, is organised by MAS, Enterprise Singapore and National Research Foundation Singapore in collaboration with The Association of Banks Singapore and SingEx. In an interview, Enterprise Singapore assistant CEO Edwin Chow describes how his organisation nurtures start-ups. S

ustainability is one of the themes of SFFxSWITCH 2019. Two of our stories highlight fintech’s role in addressing two of the most pressing concerns of our time: climate change and sustainability. Mikkel Larsen, chief sustainability officer of DBS Group Holdings, explains how fintech can be used for good in sustainable digital finance. On the other hand, the work needed to reach a common global standard to measure sustainability in finance is challenging.

In a separate interview Julia Walker, head of market development, risk, for Asia-Pacific at Refinitiv, and co-author of Sustainable Development Goals: Harnessing Business to Achieve the SDGs through Finance, Technology and Law Reform, says fintech can help direct capital into sustainable finance. 

Race to be Singapore’s next digital banks

Singapore banks have already created standalone digital banks — digibank by DBS and TMRW by United Overseas Bank (UOB).

With applications for two digital full bank licences and three digital wholesale bank licences to be awarded in mid-2020 now open, digital banks and digital banking were actively discussed by our interviewees. One point of discussion was the difference between digital banking and a digital bank. The former is part of an omni-channel strategy in which customers use a banking app as one of the products and services offered by a bank. A digital bank, meanwhile, is a mono-channel in which the bank uses data to engage customers as its primary goal and business model.

NEC Corp’s director of digital integration division, Daiichi Iwata, says digital banking will be different from traditional banking, as it is “based on a deeper understanding of people and businesses, with data to provide services on demand. Banking is about understanding people and businesses, and technology is about providing better insights and more information for banks and financial institutions”.

Lim Chung Chun, chairman and CEO of iFAST, says in an interview that iFAST, via a consortium, is keen to apply for a digital wholesale bank licence in Singapore. He says iFAST will submit its application “just before” the deadline, as the company is currently preparing the relevant paperwork.

In the second quarter of last year, iFAST announced that its wholly-owned subsidiary iFAST Hong Kong had submitted an application to the Hong Kong Monetary Authority for a virtual banking licence but was not shortlisted for the next phase.

Other digital bank aspirants in Singapore are Singapore Telecommunications, Grab Holdings, Razer, Validus Capital, Oversea-Chinese Banking Corp, Vertex Ventures and Keppel Corp. They are reported to be interested in applying for the new digital bank licences either on their own or as part of a consortium. On the other hand, local cross-border start-up Nuim (formerly Instarem) has withdrawn from the race.

The last word on digital bank licences goes to Susan Hwee, head of group technology and operations at 85-year-old UOB: “Barriers to entry for technology are very low. Beyond technology, we have to understand banking and regulations. Banking is about trust, and making money in banking is about risk management; and you have to be profitable to sustain a return to shareholders, which is very important.”

Fintech for good

Financial inclusion through fintech is one of the great opportunities emerging from innovation. Financial inclusion drives development and economic growth. To this end, the API Exchange, or APIX (API stands for application programming interface), was launched in SFF2018. The platform brings together banks and fintechs, and allows them to conduct experiments in a sandbox. Asean’s smaller rural banks can access fintech solutions to drive digital transformation and financial inclusion.

So far, APIX has signed up 70 banks and 150 fintech start-ups across 19 countries. MAS chief fintech officer Sopnendu Mohanty explains how APIX works, as well as its challenges and opportunities.

For Japan’s Sumitomo Mitsui Banking Corp, its underlying aim of pushing for innovation is to build trust among its partners and with its customers, says Desmond Lee, Head of IT, Planning Department, Asia Pacific division. For the bank, innovation is an ongoing effort, adds Masayuki Nagatomo, SMBC’s Head of Asia Innovation Centre.

Prudential is a glowing example of using technology for good, by encouraging people to live healthier lives. In 2017, it adopted its “3Ps” strategy of prevention, protection and postponement for its customers. Under “prevention”, customers are given “simple nudges”, encouraging them to eat better and adopt a healthier diet. “Protection” serves customers with existing healthcare conditions while “postponement” encourages immediate treatment to delay the severity and degradation of illnesses. The insurer continues to use cutting edge technology such as AI and data analytics with strategic partners to help customers meet their 3P goals.

Four years since the first SFF, fintech has become a central part of our lives. It is used in healthtech, insuretech, banking, wealth management, sustainability and climate change; it improves financial inclusion and development in Asean, and boosts Singapore’s hub status. The journey continues.