Singapore’s Fintech Festival, held almost a month back, has now made it to my annual calendar of festivals along with Diwali, Hari Raya, Christmas and Chinese New Year. The air was almost festival-like with financial technology and business enthusiasts from around the world, making their presence felt in our small island nation. This festival of finance has always been the launch pad of sorts for ideas and initiatives that could shape the future of finance and I have always keenly watched out for the announcements made during the event. I have witnessed, whilst travelling in the region, how Asia has become a hotbed for financial services innovation, especially in the area of mobile and virtual banking, open banking, banking via social media platforms and Fintech. I was sure that this edition of the Fintech festival would be no different in terms of exploring new frontiers for the industry.
2019’s edition of the Singapore FinTech Festival primarily emerged as a forebearer of the opportunity to accelerate the transformation of the legacy, regulatory restricted, highly licensed financial industry. Till recently, a large part of the emphasis of financial institutions has been all about improved customer experience, leveraging of data, and digital transformation. However, for the first time, I could sense that the financial ecosystem is now actively embarking on a goal more significant than the financial industry itself. It was heartening to see that the industry is now able to see that the future of financial services is really about making the planet better and also addressing some of the biggest challenges that we face as humanity. There were four important takeaways for me.
- Convergence with Green - The government’s push to creating greener financial systems, with sustainability as a critical driver. With the committed investment of US$2 Bn, Singapore will see a lot more of its conglomerates and start-ups focusing its efforts on offering products that will deliver both returns and environmentally positive outcomes. Monetary Authority of Singapore (MAS) also plans to incentivize the adopters to encourage growth in green and sustainability-linked loans, roll out grant schemes, and support the development of innovative green finance solutions, among other initiatives. These revolutionary and foresight driven initiatives will progressively transform the region’s green lending from a niche to a mainstream financing activity. It will bring Fintech closer to green finance. Look out for “Green” Fintech start-ups emerging over the next few years!
- A larger Purpose – The most important words spoken were from the Singapore central bank chief, who said: “Fintech must serve a larger purpose, Fintech for GOOD.” Many of the sessions discussed at length on how can fintech enable a more inclusive global economy, the role of women in Fintech and how fintech can be an accelerator for the UN Sustainable Development Goals(SDG’s). It was interesting to note that almost every global CEO talked about a purpose that was larger than the core service that their organization was providing.
- Singapore’s National AI Strategy to transform the country by 2030 – A strategy to embrace AI to improve the lives of every citizen was announced with an initial focus on five sectors, viz., logistics, healthcare, border security, education management, & estate management. The strategy document outlines the specific initiatives as well as milestones to measure progress. https://www.smartnation.sg/docs/default-source/default-document-library/national-ai-strategy-summary.pdf
- A resurgence of Blockchain: Since the announcement by President Xi calling for China to accelerate its innovation in Blockchain, we have seen a considerable surge in conversations on applications beyond just the cryptocurrency. Payments are emerging as a huge opportunity area. MAS, along with JPMorgan and Temasek, has set up “Project Ubin” to understand the benefits derived from Blockchain towards improving cross border clearing and settlement of payments and securities. Ubin is aimed at making cross-border transactions faster, cheaper, and safer. It is undertaking industry testing to determine its ability to integrate with commercial blockchain applications. It is heartening to see MAS has been able to engage an entire ecosystem of more than 40 financial and non-financial firms to decipher the potential benefits of the network. This collaboration is what I call a focused and determined approach, where the industry is partnering to address a global challenge.
When I put the above takeaways together, one theme keeps reverberating. The future of banking is really about CONVERGENCE. The convergence of industries, the convergence of technologies, and a convergence of SDG’s with finance to help solve the biggest challenges that we face. On a lighter note, the next milestone of Fintech festival should be to integrate food, clothing, fireworks and lights, things that we usually associate with the celebration of Diwali, Hari Raya, Christmas and Chinese New Year. Already looking forward to next year’s celebration…of the future of banking!