MAS gives fintech update for Singapore

Being a Smart Nation is more than implementing technology - it also means using technology to do things smarter, and fintech will play a significant part in achieving this.  In a speech at the welcome dinner for the 2017 Singapore Fintech Festival, Ong Ye Kung, Minister for Education (Higher Education and Skills) and Second Minister for Defence, who is also a member of the MAS Board of Directors, said it is "not just a matter of applying technology, but designing more intuitive human processes and business processes."

Ong described the financial system behind a Smart Nation as being what "oils the mechanics and engine of the real world". "A smart financial centre will have fintech at its heart," he said, describing:

- How MAS is using the regulatory sandbox to promote experimentation and innovation;

- How Singapore is promoting electronic payments in its unique way; and

- How the people are being equipped for a Smart Nation as a national movement.

Report card on MAS’ fintech regulatory sandbox

 The fintech regulatory sandbox was launched in June 2016 to allow financial institutions and fintech startups to test their innovations. Since then, MAS has received more than 30 sandbox applications.

 One startup, PolicyPal, has graduated from the sandbox in August 2017. PolicyPal has a mobile app that helps users manage insurance policies.

 Another startup, Kristal Advisors, which has an AI-powered asset management platform, is currently testing its financial advisory and portfolio management service in the sandbox. 

Ong observed that MAS has received more than 30 applications to “play in the sandbox”, but said that half of the applications did not actually require the sandbox. "Many did not need any regulatory exemption and MAS told them to go ahead and launch their solutions. That is really encouraging and a positive reflection of our regulatory framework, because innovation thrives most when enterprising people can commence business and implement ideas easily," he said.

Kristal Advisors is in the sandbox testing a financial advisory and portfolio management service. Rather than recommending investment portfolios based on a set of predefined rules as is traditional, the solution uses machine learning to continuously analyse and learn from the investor’s ongoing decisions, so as to make better recommendations.


"This involves untested technology and an unconventional fund manager, so we set up some boundaries within which Kristal could test its technology in a live environment with real customers," Ong said.

The first graduate from the regulatory sandbox is an insurance broker, PolicyPal, which was founded by Val Yap after she experienced difficulties as an insurance customer. "She started PolicyPal to help customers manage their insurance policies digitally in one place. The customer uses his phone to snap photos of his insurance policies and uploads them onto PolicyPal’s mobile app. The app uses OCR* technology to digitise and analyse the documents, and give the customer an assessment of where he has duplicate or insufficient insurance coverage. And, using the app, the customer can purchase new insurance plans and store them in the same app, easily," Ong explained.

"But, as a startup, PolicyPal was unable to meet MAS’ criteria for licensing, including track record and financial requirements. And the OCR and applied analytics technologies were untested. PolicyPal was therefore granted the necessary exemptions to allow it to test its solution in the sandbox with a limited pool of actual and real customers. PolicyPal was successful in its sandbox experiment and is now a licensed insurance broker."

"The sandbox is as much a learning journey for the applicants as it is for MAS. As we learn more, we can do more for the industry, and do it better," Ong added. "MAS will expedite the sandbox application assessment so that firms can test and launch their innovative solutions faster. MAS will also further loosen the regulatory boundaries for sandbox cases where the risks do not outweigh the potential benefits of the solution to consumers."

PayNow: Phase 2

 PayNow was launched in June 2017 to allow individuals to transfer funds to each other using their mobile and NRIC numbers as identifiers.

 PayNow will be extended to businesses around the middle of 2018, to allow business to link their unique entity numbers to their bank accounts.

 This will enable businesses to make and receive payments from customers and other businesses.


Ong said that Singapore's payment systems are "open loop", or able to accommodate new solutions in the long term. "(Our systems) should be interoperable, and yet convenient. This may mean we have to put in some regulations, but these measures should not be overbearing," Ong said.

The infrastructure to support an interoperable e-payment system, FAST, was launched in 2014, followed by PayNow in July this year. FAST is Singapore’s 24x7 real-time interbank retail payment system while PayNow, built on FAST,  allows people to make interbank transfers to and from their bank accounts using the recipient's mobile phone number or personal ID number.

"The service is free to use for individuals, it is secure, and always on. Today over 600,000 Singaporeans have registered for PayNow in less than five months and we expect the number to grow," Ong said.

As businesses stand to gain the most in efficiency and cost reduction by adopting e-payments, Ong revealed that PayNow will be extended to businesses around mid-2018. "Businesses will be able to link their unique entity numbers, or UENs, to their bank accounts. This will allow businesses to pay each other, or receive payments from customers, through their UENs," Ong said.

Ong also acknowledged that there are many e-payment solutions available, and said that MAS aims to have all solutions adopt the same uniform point-of-sale interface.

Through the Payments Council, Singapore will develop nationwide common QR specifications for e-payments – the SGQR. " The major banks, e-wallet providers, and payment schemes are all on board. From next year, the SGQR will be progressively rolled out across the island. So in the very near future, when you walk into a shop that accepts QR code payments, you should only see SGQR with all the acceptance marks underneath it. If your payment method is accepted by the merchant, you just need to use your smartphone to scan and pay to a single SGQR," Ong said.

MAS and the banking industry have also been working on a unified point-of-sale, or UPOS that accepts all payment cards. "More than 17,500 UPOS terminals have been deployed at merchants like supermarkets, convenience stores, fast food chains, and government agencies. Over the next two years, thousands more UPOS terminals will be rolled out," Ong said.

Tie-ups to enable cross-border payments with India and China

NETS’ framework with the National Payment Corporation of India (NPCI)

 From the middle of 2018, NETS cardholders in Singapore can make online purchases on any NPCI e-commerce merchant website in India.

 In addition, NETS will be accepted at RuPay point-of-sale terminals in India, while RuPay customers can similarly use their RuPay cards or RuPay-enrolled mobile phones to pay at any NETS acceptance point in Singapore.

UOB and DBS’ arrangement with China’s UnionPay

 UOB and DBS will issue UOB and DBS UnionPay Cards, which can be used at all UnionPay terminals in China.

Ong also spoke about regional e-payments interconnectivity with agreements already in place for India and China. " The largest merchant acquirer in Singapore, NETS, will establish a framework to enable crossborder payment linkages with the National Payment Corporation of India or NPCI," he said.

"So from the middle of next year, anyone who holds a NETS card in Singapore can make online purchases on any NPCI e-commerce merchant website in India. NETS is also working with NPCI to allow NETS payments at all 2.8 million RuPay point of sale terminals in India. Conversely, a RuPay customer can use his RuPay card or RuPay-enrolled mobile phone to pay at any NETS acceptance point in Singapore."

UOB and DBS have also made interconnection arrangements with UnionPay, the dominant payment card platform in China. "Our two largest local banks (will) issue UOB or DBS UnionPay Cards which can then be used at all UnionPay terminals in China," Ong said.

In his capacity as Minister for Education, Ong spoke about how children are taught analytical thinking while the National University of Singapore requires all students to undergo compulsory modules in computation thinking or quantitative reasoning. Polytechnic graduates have also been given access to fintech expertise. MAS and the five local polytechnics collaborated on the PolyFinTech 100 initiative last year, to equip polytechnic graduates with the skills to take on new fintech-related jobs.

"To date, more than 1,500 students have benefitted from this initiative. The students are mentored by fintech professionals in Singapore. Participating students also interned in Silicon Valley, Shanghai, Jakarta, Munich and Sydney," he shared.

There is also a national training programme, SkillsFuture for Digital Workforce, to equip all Singaporeans – young and old, from all sectors – with the attitude and skills to work in a digitally-enabled environment as part of a shift towards lifelong learning.

Ong disclosed that Singapore's institutes of high learning, including vocational institutes and universities, will be rolling out 400 courses by early next year to cater to adult learners, and mostly in the areas of digital economy, technology, and entrepreneurship. "I think no other country has mobilised all its national education resources to prepare its people for the future as we have," he said.

TeSA FinTech Collective

 MAS, the Infocomm Media Development Authority and SkillsFuture Singapore (SSG) have launched the TeSA FinTech Collective, with six universities and five industry associations.

 The TeSA FinTech Collective aims to enhance pre-employment and continuing education training for undergraduates, postgraduates and working adults in emerging ICT skills.

 Participants will benefit from enhanced ICT curricula and on-the-job industry training opportunities in fintech-related roles.

Ong also shared that the TeSA FinTech Collective will be finalised this week. The programme, driven by MAS, IMDA, and SSG jointly with six universities and five industry associations, is part of IMDA’s Tech Skills Accelerator initiative that aims to accelerate professional development and enhance employability outcomes for ICT professionals, and is driven by the MAS-led TeSA Finance Sector Committee.

"This collaboration will be the first large scale effort between an entire industry sector and the full range of all local autonomous universities. The TeSA FinTech Collective aims to enhance pre-employment and continuing education training for undergraduates, postgraduates and working adults, especially fintech professionals, in emerging ICT skills. With better twinning between education and industry, participants in the programme will benefit from enhanced ICT curricula and on-the-job industry training opportunities in fintech-related roles," said Ong.

The 2017 Singapore Fintech Festival runs from 13 to 17 November at the Singapore Expo. It is the largest fintech festival internationally. Some 25,000 people from the regional and global fintech communities – spanning the financial, technology, and venture capitalist industries – are expected to gather, network, and exchange views at the event.

Hashtags: #SFF2017, #SGFintechFest

*Optical character recognition is technology that reads text in images and converts it into editable text.