An opening address at the Singapore Fintech Festival from MAS managing director, Ravi Menon, has outlined Singapore’s plans for the development of fintech initiatives over the next few years.

The finance industry is facing the headwinds of lower economic growth and heavier regulatory burdens and must look to re-energise with innovation, according to Monetary Authority of Singapore managing director, Ravi Menon.

Menon called on the industry to increase efficiency, better manage risks and innovate for new opportunities in his opening address at last week’s MAS Fintech Festival in Singapore.

“Innovation is not always about high-tech, it is about seeking newer and better ways to do things, about a spirit of enterprise,” he said.

“It is about hope in the future – the financial industry needs that.”

Having cited the unprecedented power of mobility, connectivity and computing power available, Menon said the internet had compressed time and space and that the biggest potential moving forward lay in harnessing the opportunities of Big Data to sharpen surveillance of the market and potential risks for customers.

“We are beginning to aggregate and analyse large data sets to gain richer insights into customer behaviour needs [and] detect fraud or anomalies in financial transactions,” he said.

“Big Data in turn is being driven by advances in sensor networks, cloud technologies and learning machines.”

Menon said that innovation would be propelled by advanced in biometrics, identity authentication and near-field communications, as well as the identification of further uses for blockchain. The distributed ledger technology will be part of Singapore’s Smart Nation plan in the near future, with MAS already in the process to test blockchain operations to settle interbank payments, verify finance invoices, detect money laundering and enforce contracts.

Menon was confident that MAS would continue to support the development of a vibrant fintech ecosystem across the country, in line with its commitment of SD$225M to fintech development over a five-year period.

“Some of the most visible fintech innovations are taking place in the payments space; they are making payments cheaper, faster, better – delighting customers and giving banks a run for their money,” Menon said of fintechs.

“Singapore’s fintech agenda is to facilitate the infrastructure necessary for an innovation and the adoption of new technologies.”

On the payments front, Menon announced MAS’ intention to streamline the licensing process for payments services to be under a singular, activity-based modular framework, so that common standards for consumer protection and Cybersecurity would be adhered to.

Another challenge facing the industry at large that would also be specific to Singapore’s finance sector was the constant chase to supply customer-centric customer services and products.

“The digital offering of financial advice…is becoming more popular, catering to the needs of a growing segments of technology-savvy, self-directed consumers,” Menon said.

“We need to make it easier for consumers to benefit.”

The ability of the country to provide the highest level of digital offerings relied heavily on the financial industry and fintech community to collaborate, which Menon said could lead to creating the appropriate infrastructure of a modern innovation system.

Menon listed the new infrastructure initiatives in process at MAS, including a new infrastructure for electronic payments, a blockchain infrastructure for cross-border inter-bank payments and an open Application Programming Interfaces (API) architecture.

“APIs are likely to be one of the most important building blocks for innovation in the future economy,” Menon said.

“We are actively pushing FIs to develop and adopt APIs, to offer as many of them as possible to the broader community.”