The Future of FinTech: Public and Private Partnerships
By Sopnendu Mohanty, Chief FinTech Officer, Monetary Authority of Singapore (MAS)
The FinTech sector has grown exponentially in South East Asia with new digital products and services offered by incumbent financial institutions as well as FinTechs and TechFins. The new wave of digital banking licenses across APAC has further spurred innovation as well as an injection of venture capital investment in the region, with investment into Singapore-headquartered FinTech companies surpassing S$1 billion for the period Q1 – Q3 2019. Policy makers in the financial sector play a key role in supporting these activities. However, more needs to be done to keep pace with technology and innovation, and ensure these developments lead to a more inclusive digital economy.
While the private sector is innovating to bring financial services to a greater section of society, it also faces barriers such as economic viability of serving unbanked populations and the ability to reach to the last mile given financial literacy, trust and identity challenges. Public infrastructure is required to address these challenges, ensure inclusivity and accelerate innovation by enabling the more effective movement of information and trade.
In the same way that FinTech has catalysed the digital transformation of the financial sector, public digital infrastructures can help countries to improve the economic and social well-being of their populations by providing fundamental digital services – both financial and non-financial – more efficiently, affordably and quickly.
Public digital infrastructure, from a national identity system to national consent architecture, is the essential foundation for all countries in the digital age. This allows governments, businesses, startups and citizens to transact financial (e.g. mobile payments, opening banking accounts), and non-financial information (e.g. healthcare) in a seamless and efficient way. Singapore, India and Estonia are great examples of countries that are embracing digital technologies through the provision of national digital infrastructure.
Singapore’s digital infrastructure enables digital identity, payments and consent for its citizens. Firstly, through SingPass, a single digital identity that citizens can use to access both government and private sector services. Secondly through PayNow, a service which enables peer-to-peer, real-time fund transfers via mobile that runs on Singapore’s national real-time payments system. Lastly, data empowerment through MyInfo, a digital service that enables citizens to authorise third parties to access their personal data. With consent, third parties can use MyInfo APIs to access this government-verified data to authenticate their customers and make business decisions relating to that customer.
India has been on a digital transformation journey over the past decade through the development of its national initiative, The IndiaStack, which is a set of APIs that allows governments, business, startups and developers to utilise its digital national digital infrastructure. This foundation is enabling a wealth of new products and services to be developed for all key stakeholders in the ecosystem. In particular, it has spurred activity from local and international technology companies in the provision of last mile solutions in an affordable and seamless way.
Outside of Asia, Estonia has made great strides through its X-Road platform, which connects different systems used in the public and private sector and allows them to share information. A strong policy framework has enabled citizens to securely access online services using their digital ID card. The card, along with digital signatures that are equivalent of handwritten signatures, can be used to pay taxes, vote, bank online and access health records. The X-Road platform has taken friction out of the provision of everyday services that its citizens require, while making a big impact in financial services.
For countries that have taken this digital infrastructure approach, the opportunities to connect respective systems are vast. Singapore and India have recently collaborated to explore services for consumers and businesses to transact seamlessly across borders through a public and private sector partnership.
As more digital infrastructures are developed, opportunities for greater interoperability and cross-border use cases will come to life. A great example of a public and private partnership that is facilitating cross-border experimentation is APIX, the API Exchange platform, launched by the Monetary Authority of Singapore, the World Bank’s IFC and the ASEAN Bankers Association. APIX is the world’s first cross-border, open-architecture API marketplace and sandbox platform for FinTech and Financial Institution collaboration.
Join us at the Singapore Fintech Festival, to be held from 11 to 15 November, where these conversations will be played out on stage with best in class initiatives shared and the latest national and cross-border use cases explored. Session highlights on 11 November 2019 include:
2020: Banking in a New Global Context
- Bill Winters, Group Chief Executive, Standard Chartered
- Calvin Choi, Chairman & Chief Executive Officer, AMTD Group
- John Dugan, Chair, Citigroup Inc.
- Noel Quinn, Group Chief Executive, HSBC Holdings plc
- Piyush Gupta, Chief Executive Officer, DBS
- Moderator: Haslinda Amin, TV Anchor, Chief International Correspondent Southeast Asia, Bloomberg
2020: Digital Transformation Agenda
- Aishah N. Ahmad, Deputy Governor, Financial System Stability, Central Bank of Nigeria
- Henry Ma, Executive Vice President & Chief Information Officer, WeBank
- Kristo Kaarmann, Chief Executive Officer & Co-Founder, TransferWise
- Roman Regelman, Senior Executive Vice President, Head of Digital, BNY Mellon
- Moderator: Bob Contri, Global Financial Services Industry Leader, Deloitte
2020: Policy Choices for the Digital Economy
- Arunma Oteh, Academic Scholar, University of Oxford
- Daniela Stoffel, State Secretary, Swiss State Secretariat for International Finance
- Senator the Hon Jane Hume, Assistant Minister for Superannuation, Financial Services & Financial Technology, Australian Government
- Saeb Eigner, Chairman, Dubai Financial Services Authority
- Moderator: Matthew Gamser, Chief Executive Officer, SME Finance Forum
Learn more about the sessions here.