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Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS) underscored the word “Trust” as a vital resource for the market economy, influencing economic outcomes at macro and micro levels; and emphasising that it leads to higher incomes, increased investment, and economic growth.
“The financial services sector relies heavily on trust, and its absence can lead to the downfall of institutions like banks,” said Managing Director Ravi.
He mentioned that trust is crucial for payment systems, digital banking, and e-commerce. In the absence of trust in capital markets, investment declines, raising the cost of capital for businesses. Ravi further explained that good corporate governance is essential for building trust and can be achieved by doing well, doing right, and doing good.
- Doing well involves introspection and diversity in corporate boards, ensuring performance assessments are meaningful, and bringing expertise in emerging areas.
- Doing right involves going beyond legal boundaries, emphasising company culture and values, and promoting ethical behaviour.
- Doing good involves transparency in profit-making activities, sustainability practices, and addressing environmental and social impact through credible sustainability disclosures, transition planning, and leading by example.
Addressing sustainability challenges includes adopting global standards, improving data availability and accuracy through technology, and leveraging solutions to meet sustainability reporting requirements. Companies can utilise tools like ESGenome and participate in capacity-building programmes for sustainability reporting.
In addition, MAS is using artificial intelligence (AI), machine learning (ML), and advanced data analytics to detect fraud and suspicious activities in the financial sector. Nevertheless, recent instances of money laundering have highlighted the necessity for improved comprehensive monitoring.
MAS intends to apply AI to improve its COSMIC platform, which allows financial institutions to communicate information on suspicious customers or transactions. As a result, AI will bring additional insights for a more thorough risk assessment, emphasising the significance of a balanced approach to managing the benefits and dangers of AI in the financial sector.
Further, OpenGov Asia earlier reported that the Financial Sector Technology and Innovation Scheme (FSTI 3.0), which has been updated, will receive up to S$150 million over three years from the MAS. FSTI 3.0 doubles down on MAS’ commitment to foster a thriving technological ecosystem for the financial sector while supporting initiatives that leverage cutting-edge technologies or have a regional nexus to boost and accelerate innovation.
The Centre of Excellence track (formerly Innovation Labs) now offers grant financing for corporate venture capital (CVC) firms, covering up to 50% of their eligible costs, with a maximum of S$2 million per project. This investment aims to assist CVCs in mentoring and scaling startups. The Innovation Acceleration Track focuses on collaborating with the market to support cutting-edge FinTech solutions, particularly those resulting from Web 3.0 technology. Grant funding is available to support the commercialisation and testing phases.
Likewise, the Environmental, Social, and Governance (ESG) FinTech track aims to accelerate the adoption of ESG fintech solutions by supporting the development and deployment of projects that address the financial sector’s ESG data, reporting, and analytics needs, with funding support of up to 50% of qualifying expenses, capped at S$500,000 per project.
FSTI 3.0 will continue to assist the adoption and development of new capabilities in crucial fields including regulation technology (RegTech) and AI and data analytics (AIDA). MAS will concentrate on encouraging AIDA implementation in smaller financial institutions and assisting institutions that are less digitally advanced in their search for RegTech solutions.
