Continuing its series of sessions with the financial sector industry across ASEAN, OpenGov Asia hosted its third OpenGovLive! Virtual Breakfast Insight with delegates from Thailand on 20 August 2020.
The event once again saw a 100% attendance and a great level of involvement from the audience on the topic of Powering Next-Generation Compliance with AI and Advanced Analytics.
Understanding the importance of compliance and risk management for the financial industry in these tough times and the urgency of deploying tech in this process was the major focus of the varied insights from delegates and speakers.
The session was opened by Mohit Sagar, Group Managing Director and Editor-in-Chief at OpenGov Asia.
Mohit shed light on the harsh reality of the times where everybody is masking data. Further, the danger from threat actors is becoming more and more sophisticated.
These cybercriminals are leveraging advanced technology with a destructive mindset and without any constraints of regulation or compliance.
Financial organisations cannot afford to lag behind in keeping up with the latest technological developments in the field if they want to protect themselves and simultaneously outdo adversaries to survive.
On the issue of compliance, Mohit felt that it had to be seen as a part of the big picture and not seen in isolation. Compliance must be part of a robust framework that necessitates using AI and Analytics to derive desired and clean outcomes.
However, it is important to understand that technology can only augment existing human resources, not replace them.
He concluded by stressing the need for focused leadership and the need to collaborate with partners who champion the field of technology.
After Mohit, Nutapone Apiluktoyanunt, Managing Director, SAS Thailand shared his views on the topic with the audience.
Nutapone began by introducing the company and given a brief overview of the work globally. He spoke about how SAS used analytics to effectively share data around the pandemic with the public using free dashboards.
He shared that their objective as an organisation is to improve lives by making better decisions and they do it by providing a wide range of tech-driven solutions to their customers.
Nutapone then went into detail about other the incredible projects done by SAS in the financial sector industry. These initiatives support areas like digital transformation, customer experience, risk management and fraud & security management.
Making it relatable for the audience, he delved deeper into fraud & security management solutions. Elaborating the myriad of ways in which it can help financial organisations including monitoring, conduct assurance, financial intel and compliance, market and trade surveillance.
He concluded by highlighting SAS’s strength as leaders in the field; not only do they only have solutions for payment fraud and anti-money laundering but are champions in data and analytics.
After Nutapone’s presentation, Ahmed Drissi, Anti-money laundering lead- APAC for SAS shared more details into the SAS money laundering Solution.
Ahmed began by talking about the challenges in using the traditional AML solutions; key among these is their inability to cope with the high volume of online transactions. Ahmed then explained how their solutions can help overcome these challenges.
He spoke about other stakeholders in the industries, like regulators, who also recognise the benefits of using AI and ML in anti-money laundering initiatives. These stakeholders are now whole-heartedly encouraging the use of these technologies in the field.
He supported this by sharing examples of financial regulatory authorities in the USA, UK, and Singapore have started recommending the use of AI and ML in the context of anti-money laundering.
Ahmed went on to share a visual graphic representation of the three phases of AI and ML adoption cycle as done by large global and regional banks. The three phases are Innovation, Adoption and Maturity.
This phased approach was a key insight into how SAS helped organisations improve operational efficiency and reduce false positives.
He also enumerated various AI and ML use cases in AML that include: entity resolution, customer segmentation, post alert scoring, model detection, tuning and optimisation.
In concluding, he presented a bouquet of SAS offerings – Financial Crimes Analytics Solutions – that help monitor and prevent fraud incidence in the organisations.
After Ahmed, Viswanathan Namasivayam, advisor for Data Science Enterprise Architecture, Data and AI group at UnionBank Philippines shared his expert opinion on the topic.
Viswanathan started by pointing out the need for banks and financial institutions to make compliance simplified and robust in light of ever-increasing fraud and hacking incidents.
He highlighted the power of advanced tech like AI and ML. Its efficacy lies in its ability to go beyond a single representation of an individual or an entity rendering a better understanding of fraud risk.
He also emphasised the fact that using tech in regulation and security is non-negotiable and validated this stance with a recent case study from Germany.
To further underscore his point, he shared how supervisors and regulators of the industry are also implementing and encouraging the use of new tech.
He concluded by pointing at the significant paradigm shift in organisations’ approach in handling fraud incidences from initiating action after something irregular has been detected to taking actions to prevent the fraud risk.
Viswanathan was confident that this is was a big step for organisations on their journey towards having a robust risk and fraud management system.
After this powerful presentation, it was time for the polling question session to get all the delegates involved in the discussion.
On the first question regarding major challenges faced during AML investigation process, the Thai audience was split between High rates of false positives (41%) and Lack of data/insights around customers, accounts and entities (41%).
A senior delegate from a major bank shared that not only is the data insufficient, it also lacks accuracy, which makes the investigation very challenging. Furthermore, fraud investigation is not an isolated process, it requires analysing data not just during the time of the incident but also from the surrounding blocks of time. Thus, insufficiency and inaccuracy of data become significant challenges.
It was interesting to see that the response to this question in Thailand was along the same lines as it was in the Singapore session. There too, a majority of delegates voted for high rates of false positives (44%) while the rest of the responses saw an equally distributed portion of votes.
In regard to the next question about the areas that would benefit most from the use of AI and ML the audience was divided among all the available options but two of them accounted for over half the group: Alert triage and risk prioritisation (27%) and Automated disposition of alerts(27%).
A senior compliance officer from a public sector bank shared that she voted for Alert triage and risk prioritisation as in this area, AI can help automise a lot of procedures and processes making them speedier and more efficient. This makes overall work progress fast.
The response to this question in the Singapore session featured an almost equal distribution of responses over all the available options as opposed to a clear inclination towards anyone of them.
On the final question of the expected time to complete an investigation with regards to the enhanced due diligence process, a majority of the audience voted between 30-60 minutes (40%).
When asked for a reflection, another on of our delegate shared that using AI/ML can really help speed up the investigation process, but it also partly depends on how quickly can you get the information from your customer. If your case management system allows you to communicate directly with the customer and get the information embedded in the case, that can really speed up the process too.
It was interesting to observe that when the same question was asked to the Singapore delegates, many shared that they spend more than 24 hours to complete an investigation – pointing to an urgent need for AI/ML-driven solutions.
After the polling session, Ahmed concluded the session with closing remarks. He thanked all the delegates for their time and participation in the event. He said that adopting tech in regulation requires laser light focus – something that SAS champions. He encouraged delegates to engage and collaborate with them if they are working towards it.
As the digital economy and tech-driven capitalism continues to rise, PTT, a Thai state-owned SET-listed oil and gas company, has plans to join hands with a leading tech-platform in Silicon Valley to drive the Thai economy.
With the intention to transform Thailand through digital transformation, the company announced its collaboration with an innovation platform company based in Silicon Valley.
The collaboration will groom Thai and international investment start-ups with three major fintech platforms in their portfolio to aimed at raising national competitiveness under the Powering Thailand’s Transformation initiative.
The public company hopes to create an international Innovation Ecosystem with the Partnership and Platform strategy to become more than just a manufacturer and distributor. To this end, it hopes to attract potential partners such as large firms and tech start-ups globally, through the innovation platform company, as an accelerator platform to drive its business.
The PTT Senior Executive Vice President, Innovation and Digital, stated that the collaboration is a good opportunity for us to make the most of our potential to be creative and innovative, and then achieve concrete outcomes.
It is also an opportunity to learn from leading companies and use what we learn to improve, so PTT and Thailand can compete globally.
In doing this, the public company will have more partnership channels and earn more recognition. This will enable the company to establish direct contact with tech companies. Moreover, data obtained from different start-ups and firms can be invaluable for PTT itself in extending the company’s s-curve with its ExpresSo team.
Expert at innovation and tech business, PTT ExpresSo has a firm hold on three blueprints.
New Energy is the idea of building a business with alternative energy for sustainability and energy security by adopting technology for effective maintenance of solar cells for example.
New Mobility is the notion of improving domestic transport systems to reduce pollution for better quality of life for people, including battery production for electric cars.
New Industry is the concept of driving Thailand’s capacity to compete under Industry 4.0 management and maintain national economic security such as artificial intelligence (AI) systems for factories.
The VP, Corporate Innovations, APAC at the innovation platform company stated that leading tech companies will collaborate, including companies in energy and sustainability, real estate, autos, internet of things (IoT), and health. They are ready to solve problems in response to PTT’s needs, especially how to develop alternative energies, drive new transport forms and propel Thai industry into Industry 4.0.
With over 32 global affiliations, the Plug and Play platform brings together over 400 leading corporations and start-ups. It also facilitates over 50 business accelerations and supports more than 10,000 start-ups every year.
The COVID-19 pandemic has irreversibly impacted and changed the world as we know it, OpenGov Asia recently reported.
Overall, ICT has played an important role in battling COVID-19, and it will continue to factor in economic recovery in the new normal.
One report found that in the first quarter of 2020, social distancing practices led to an average broadband consumption increase of 47 percent to 402.5GB, from 273.5GB during the same time in 2019.
While most of this is attributable to an increase in online video consumption, the pandemic has given rise to new consumer behaviour that includes increased use of delivery apps, more frequent and immersive video conferencing, and greater dependence on e-Education and work-from-home solutions.
These systems have existed for years but the uptick in usage in the last few months has brought them to the forefront; it is believed that even post-pandemic, usage levels are expected to remain high.
The ASEAN region is expected to be one of the biggest, if not the biggest, economic entities in Asia. Many countries are pushing hard to secure the leading position in digital transformation, and while the title is still for the taking, 5G will help all ASEAN nations move from predominantly 2C-focused mobile broadband business models to 2B.
This will be paramount for digital transformation in many vertical industries including healthcare, hospitality, manufacturing, logistics and more.
Proactive policies that accelerate the deployment and adoption of digital services are key to moving the economy ahead and ensuring continued reliable operation even in the face of adversity.
Thailand’s digital infrastructure of the future needs to be agile enough to accommodate new applications and behaviours as well as robust enough to serve as a reliable digital platform for the economy even when unpredictable situations arise.
Each year, companies are required to file Annual Returns with the Accounting and Corporate Regulatory Authority (ACRA) and Corporate Income Tax Returns with Inland Revenue Authority of Singapore (IRAS). Smaller companies can take up to about 9 hours to manually prepare these returns and file them with both agencies.
To reduce regulatory burden, ACRA and IRAS have partnered accounting software providers to incorporate ACRA and IRAS’ filing requirements into their accounting software.
ACRA and the IRAS have partnered accounting software providers to co-create a new digital solution that allows SMEs to automate the preparation and filing of statutory returns with IRAS and ACRA seamlessly.
This seamless filing solution is in line with the Smart Nation initiative to help SMEs stay relevant and competitive by equipping them with innovative solutions to digitalise their operations and improve productivity.
Ms Ang Siok Hui, ACRA’s Divisional Director for Customer Experience said, “The seamless filing solution is part of ACRA’s ongoing efforts to make compliance fuss-free and easy. Through private and public partnerships, ACRA plans to extend this seamless filing solution to more statutory filings in due course. We also hope this will encourage more SMEs to adopt digital solutions and make further progress in their digital transformation journey.”
The software automatically generates the required returns for companies with simple tax affairs and accounting transactions.
It is also linked to both ACRA and IRAS’ systems via APIs, to enable companies to file with both agencies without the need to log in to 2 separate portals – the ACRA’s BizFile+ and IRAS’ myTax Portal.
With this new seamless filing initiative, it now takes about half-an-hour for companies to prepare and file Corporate Income Tax Return (Form C-S) and Annual Return with Financial Statements in Simplified XBRL format with IRAS and ACRA respectively.
This translates to time saving of more than 90% for these companies. An estimated 200,000 SMEs can potentially benefit from this initiative.
Ms Chow Wai Yee, Assistant Commissioner of IRAS’ Corporate Tax Division said, “IRAS is always striving to improve our digital services so that taxpayers can meet their tax obligations with ease and at their convenience. The seamless filing solution will greatly simplify the filing process for small companies, and we encourage small companies to try it.”
Support to help SMEs adopt Digital Solutions
SMEs currently not using any accounting software for their operations are encouraged to digitise their accounting and tax records and improve their productivity. SMEs can tap on the following support schemes for funding of the accounting software:
Productivity Solutions Grant offered by the Enterprise Singapore where a funding support of up to 80% (from 1 April 2020 to 31 December 2020) will be made available on the purchase of pre-approved IT solutions.
Start Digital Pack offered by the Infocomm Media Development Authority (IMDA) to SMEs embarking on their first steps to go digital. SME can sign up for the accounting software at no cost for the first six months, with a minimum 18-month contract period.
Digital Resilience Bonus offered by IMDA where SMEs in the Food Services and Retail sectors may be eligible to receive payouts of up to $10,000. Apart from purchasing the accounting software, SMEs in these sectors also need to meet other conditions such as adopting PayNow Corporate, e-invoicing and HR/Payroll software in order to qualify for the bonus.
The Hong Kong Institute for Monetary and Financial Research (HKIMR), the research arm of the Hong Kong Academy of Finance (AoF), on 21 August 2020, released its second Applied Research report, titled “Artificial Intelligence in Banking: The Changing Landscape in Compliance and Supervision”.
HKIMR Applied Research reports are released on topics that are highly relevant to the financial industry and regulators in Hong Kong, and they aim to provide insights on the long-term development strategy and direction of Hong Kong’s financial industry.
This report is part of a research project on the adoption of artificial intelligence (AI) in banking, carried out in collaboration with the Hong Kong Monetary Authority (HKMA) and other collaborators. It aims to assess the current status of AI adoption in the Hong Kong banking industry and its implications for banking compliance and supervision.
The first part of the report assesses the current status of AI adoption in the Hong Kong banking industry based on an industry-wide survey conducted by the HKMA, and the findings indicate that banks in Hong Kong have adopted AI in all key functional areas. Over 80% of participating banks view AI adoption as a way of improving efficiency and strengthening risk management. Banks are also optimistic about the prospects of using AI, with some 80% of survey respondents planning to increase investment in AI over the next 5 years.
The second part of the report provides useful insights about the risk management framework for banks adopting AI, the overarching principles guiding the supervision of AI adoption in banking and the development of AI-aided compliance and supervision (Regtech and Suptech). The Senior Executive Director of the HKMA and Deputy Chairman of the HKIMR stated, “we are delighted that the banking industry is adopting AI positively. We hope this report serves as a starting point towards understanding the implications of AI applications for the banking industry, especially for its compliance and supervision.
About the Hong Kong Academy of Finance (AoF)
The AoF is set up with full collaboration amongst the HKMA, the Securities and Futures Commission, the Insurance Authority and the Mandatory Provident Fund Schemes Authority. By bringing together the strengths of the industry, the regulatory community, professional bodies and the academia, it aims to serve as
- a centre of excellence for developing financial leadership; and
- a repository of knowledge in monetary and financial research, including applied research.
About the Hong Kong Institute for Monetary and Financial Research (HKIMR)
The HKIMR is the research arm of the AoF. Its main remit is to conduct research in the fields of monetary policy, banking and finance that are of strategic importance to Hong Kong and the Asia region. The Applied Research studies undertaken by the HKIMR are on topics that are highly relevant to the financial industry and regulators in Hong Kong, and they aim to provide insights on the long-term development strategy and direction of Hong Kong’s financial industry.
OpenGov Asia previously reported, in May 2020, that the HKIMR a report titled “Fintech Adoption and Innovation in the Hong Kong Banking Industry”. It was the first in a series of Applied Research reports on topics that are highly relevant to the financial industry and regulators in Hong Kong, and they provide insights on the long-term development strategy and direction of Hong Kong’s financial industry.
The report stated that in recent years, waves of Fintech innovations, enabled by rapid developments in telecommunications and information technology, have led to an increasing degree of digitalisation and the emergence of various new technological applications and solutions in the global financial sector. Given their relative importance in Hong Kong’s financial sector and their integral role in intermediating funds for the economy, the effect of Fintech on banks’ business operations is expected to be of keen interest to the financial industry, regulators, and academia in Hong Kong.
Invest Hong Kong (InvestHK) recently unveiled the Global Fast Track Programme, a business-driven programme within Hong Kong Fintech Week (HKFW), Asia’s annual flagship fintech event, to help local and global fintech enterprises leverage Hong Kong’s proven resilience and fintech opportunities to scale business and accelerate innovation.
The Fast Track programme plugs fintech enterprises directly into Hong Kong’s diverse ecosystem of world-class regulators, business leaders, corporates and investors to propel their ventures across Hong Kong and elsewhere in the Guangdong-Hong Kong-Macao Greater Bay Area and Asia where digitisation and fintech adoption is surging.
Selected fintech ventures will pitch their innovative solutions to the Hong Kong Monetary Authority (HKMA) and senior executives of Corporate Champions. Investors like Cyberport, Hong Kong Science and Technology Parks Corporation (HKSTP) Ventures and more are also on board with up to US$1 million of investment commitment on offer per project upon further due diligence, business discussions and approval through the protocol as required by respective investors.
Fast Track drives business deals and funding
The programme is inviting companies from nine key fintech verticals (trade finance, capital markets, retail banking, commercial banking, insurance, regtech, wealthtech, payments and enterprise resource planning), to submit applications from now till 31 August. About 10 companies per vertical with the most outstanding ideas will showcase their solutions for an opportunity to join an extensive tailored B2B matchmaking programme with the Corporate Champions and investors to explore further deals and investment partnerships.
Over 10 selected finalists will then pitch virtually at the FintechHK Global Final for extra prizes at this year’s HKFW from November 2 to 6. Fast Track also features the Mainland China Track stream to help Chinese fintech enterprises scale their business overseas via Hong Kong.
The Head of Fintech at InvestHK stated that the Fast Track programme is a business outcome-driven programme designed and focused purely on accelerating new opportunities for fintech enterprises. In addition to potential deals and investment, each eligible company can also apply for the Hong Kong Special Administrative Region Government landing support from US$111,000 up to US$2.6 million, regardless of the pitching outcome. InvestHK assists worldwide fintech companies to fast-track their next success from Hong Kong.
Hong Kong to fast-track fintech enterprises into post-COVID-19 era
While COVID-19 continues to create challenges for the global fintech sector, Hong Kong, with its unique geographical advantage, provides direct access to both Mainland China and Southeast Asia, two of the world’s largest and fastest-growing fintech markets offering significant long-term opportunities.
As a result, pioneers in the fintech space and relevant regulators are eager to tap into this immediate potential by working hand in hand with the world’s brightest and best fintech ventures.
The Chief Fintech Officer at the HKMA noted that collaborating with the worldwide fintech community is key to propelling growth in fintech development. The Fast Track programme provides a unique opportunity to bring together international experts from the public and private sectors who can connect and explore innovative ideas and technology to enhance different financial solutions.
Representatives of fellow Fast Track Corporate Champions gave further testimony on the huge opportunity that Fast Track delivers for start-ups and to their enterprises as key market movers in the fintech sector.
This year’s Fast Track programme at HKFW created opportunities for serious players to connect deeply into the region through joining the local ecosystem networks and tap into diversified pockets of investors and collaborative partners to capture the vast opportunities in the Greater Bay Area and the surrounding region, the Chairman and CEO of a leading Hong Kong-headquartered comprehensive financial institution stated.
The HKU FinTech Index Series Project released the Hong Kong FinTech Buzz Index (FBI) for the second quarter (Q2) of 2020 on 17 August 2020.
According to the 1,190 news articles analysed in the past three months, the FBI for the second quarter (Q2) of 2020 is 101.6, a slight decline of 0.1 index point (or 0.10%) from 101.7 in the first quarter of 2020. The index decreased by 3.1 points (or 2.96%) from the peak value of 104.7 in Q2, 2019. Despite the strong growth of RegTech and InsurTech this year, the Hong Kong FBI was flat under the ongoing COVID-19 pandemic.
Hong Kong FinTech Buzz Index (FBI) is a quarterly index that represents a quantified sentiment of the local FinTech-related news articles in local Chinese news media. Performance differed across the six subsectors, with a rise recorded in the sub-indices of Insurance Technology (InsurTech), Wealth Technology and Credit Technology (WealthTech & CreditTech) and Regulatory Technology (RegTech) & Cybersecurity.
The rise in the InsurTech sub-index can be attributed to positive news reports from the Hong Kong Insurance Authority’s granting a 4th virtual insurance license to a Chinese online-only insurance company. The announcement of Wealth Management Connect by HKMA also brought good news to the WealthTech & CreditTech sector.
Positive news reports leading to the rise in RegTech sub-index are mainly on the trial run of a subsidiary of a leading technology-as-a-service platform for financial institutions in China. This subsidiary is committed to establishing a virtual banking ecosystem in Hong Kong by optimising customer-centricity services through its innovation and sophisticated technology. The project was awarded a trail under the FinTech Supervisory Sandbox by HKMA.
About the HKU FinTech Index Series Project
The HKU FinTech Index Series Project introduces the Hong Kong FinTech Growth Index (FGI) and the Hong Kong FinTech Buzz Index (FBI) to gauge local FinTech companies’ outlook on the industry and the general sentiment on the sector as reported by the local press. It is the first in the region to provide index indicators on the development of the sector, intending to provide information promptly to track the growth and development of the financial technology industry in Hong Kong.
FGI is a yearly index with four sub-indices on Business Environment, Business Performance, Investment on R&D and Demand on Talent. It reflects Hong Kong FinTech sector’s forecast of the market situation in the coming year and assesses the situation in the current year. FBI is a quarterly index representing a quantified sentiment of the local FinTech-related news articles in Chinese for the past three months.
The index has a base value of 100 points which represents the sentiment of nearly 10K FinTech related news articles in major local news media outlets in 2016 and 2017. FBI is further broken down into six sectors: Insurance Technology (InsurTech), Wealth Management and Credit Technology (WealthTech & CreditTech), Blockchain & Cryptocurrency, E-Payment & Digital Banking, Regulatory Technology (RegTech) & Cybersecurity and other related business including AI and big data.
The project was initiated by the technology transfer company of the University and is led by a doctor at the Department of Statistics and Actuarial Science of the Faculty of Science.
About HKU FinTech Index Advisory Board
The Advisory Board comprises professionals from the University of Hong Kong and the local FinTech industry, including representatives from FinTech Association of Hong Kong, InvestHK, Cyberport, Hong Kong Science and Technology Parks Corporation, and a major bank.
The members provide expert advice on the FinTech companies to be included in the master list for the annual survey to return the FinTech Growth Index. They also advise the Project on index methodology.
A local Malaysian bank recently introduced two digital-first solutions for customers, namely the online-to-branch account opening process for individual banking customers and Biz Financing Portal for small and medium enterprises (SMEs). These paperless solutions are aimed at making the bank’s banking offerings more accessible, providing safety and convenience by leveraging digital capabilities to enhance the customer experience.
Individual customers are now able to submit their application, to open a current or savings account, online via the bank’s new online-to-branch account opening process. Customers can pre-fill an account opening e-form on the bank’s website to initiate the process. Once submitted, customers are able to make use of a dedicated e-account opening priority queue available in all branches for the last step of their application i.e., the Know-Your-Customer (KYC) due diligence, to complete the account opening.
This solution has been rolled out to all branches nationwide and has since reduced the service time for account opening by more than 50%. As for SMEs, they will now be able to submit financing applications online at the bank’s Biz Financing Portal. The portal will enable SME customers to upload documents and submit loan applications entirely online, providing convenience by eliminating the need to visit a branch. The portal was launched on 13 July 2020, and customers can now utilise the portal to apply.
The Group Chief Strategy & Design Officer of the bank stated that the introduction of these digital-first initiatives matters more than ever under the new normal of banking and payments today. These initiatives are aligned with the bank’s two main pivots of Forward23 i.e., customer and, tech and data, aiming to digitise and simplify the bank’s products and processes to provide a more seamless and convenient banking experience to our customers.
Digitalising their banking process also addresses the social distancing considerations to protect the well-being of the bank’s customers and employees by significantly reducing the amount of physical interaction required. The current situation has and will certainly reshape customers’ banking behaviour going forward and is accelerating their pace of innovation to deliver the best value proposition to meet their demand whilst keeping them and our employees safe at all times.
Complementing the bank’s Biz Financing Portal is the Amazing Customer Experience (ACE) productivity tool for the Bank’s Relationship Managers (RMs), which enables them to submit loan applications from commercial customers for processing online. Live since 11 November 2019, the mobile productivity tool is equipped with optical character recognition (OCR) and natural language processing (NLP) capabilities for robotic process automation (RPA), allowing RMs to extract data securely and efficiently to autofill required details.
This cuts processing time by reducing manual data entry and automating loan processing. Clients will also receive automatic notifications on their application status, ensuring full transparency. With ACE, RMs remain safe and productive while continuing to serve customers’ needs remotely. These solutions are part of the bank’s on-going initiatives to improve end-to-end customer experience using a design-thinking approach, spearheaded by a Transforming Customer Journey (TCJ) unit.
Moving forward, the bank will continue with its digitalisation efforts to enhance customer experience and support customers’ needs, particularly in the COVID-19 environment.
The Monetary Authority of Singapore (MAS) announced that it will commit S$250 million over the next three years under the enhanced Financial Sector Technology and Innovation Scheme (FSTI 2.0) to accelerate technology and innovation driven growth in the financial sector.
The launch of FSTI 2.0 was announced by Mr Ravi Menon, Managing Director, MAS, at the “Singapore FinTech Festival: Green Shoots Series”. FSTI 2.0 will introduce several enhancements to support innovation in the financial sector.
FSTI 2.0 also aims to strengthen support for large-scale innovation projects, and build a stronger pipeline of Singaporean talents in FinTech.
Increased Funding for early stage technology ventures
MAS will double the maximum funding quantum, from S$200,000 to S$400,000, under the Proof-of-Concept (POC) Grant, and will increase the maximum funding support from 50% to 70% of qualifying project cost.
The higher funding support will enable financial institutions and FinTech firms to undertake larger-scale POC projects to experiment, develop and deploy innovative solutions, empowered by emerging technologies.
A merit-based tiered funding mechanism will be introduced to replace the existing flat 50% funding support of qualifying project cost. A higher level of funding will be allocated to POC projects which demonstrate stronger merits.
Advancing the use of Artificial Intelligence within the financial sector
MAS will raise the maximum funding quantum for all qualifying AI projects under the Artificial Intelligence and Data Analytics (AIDA) Grant from S$1 million to S$1.5 million, to provide greater impetus for financial institutions to implement ground-breaking and innovative AI solutions.
In addition, MAS will introduce a new AIDA-Lite track, providing half the funding quantum of the AIDA track. With AIDA-Lite, financial institutions will be able to obtain funding support to adopt proven AI solutions to enhance their operations.
Reinforcing the FinTech talent pipeline in Singapore
MAS will co-fund existing innovation labs for new Singaporean hires to encourage the expansion of existing labs and groom Singaporean talent.
All new projects under the Financial Institution-Level Projects, Industry-Wide Projects and AIDA Tracks will now qualify for funding support for capability transfer-related training costs.
Training costs include expenses incurred to engage specialists to train the local talent pool, and expenses incurred to send local employees for overseas trainings.
These training programmes will help to support workforce transformation in the financial sector and to accelerate skills and knowledge transfer to Singaporean talents.