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IFGS 2023: Singapore seeks coordinated and global approach to fintech

IFGS 2023: Singapore seeks coordinated and global approach to fintech

In the fireside chat with the Monetary Authority of Singapore (MAS), chief fintech officer, Sopnendu Mohanty, discussed the current financial landscape in Singapore and the fintech developments in the region with moderator Sasha Qadri.

Noting that Singapore was an expected area or fintech to blossom due to its small market and well-banked status, Mohanty stated that Singapore had to think differently and act consistently: he credited the investment growth in Singapore to B2B fintechs, which have been creating infrastructure for incumbents to innovate faster. He pointed out that the demand to digitise at a rapid rate during the pandemic led to capital allocations and sustained growth.

Crypto was a large area of investment in Singapore in 2022, Mohanty reasoned that this was in expectation of support in crypto industry due to the strong regulatory stance when it comes to digital assets in the island nation. Additionally, he mentioned the clamping down of consumer protection in Singapore after multiple crypto failures has added to consumer trust.

Mohanty advised fintech firms to rethink their business models as progressive policymakers and regulators will be placing disproportionate focus and capital behind digital public infrastructure:

“Governments are going to put a lot of capital to natural efficiency in payment processing and lending to public, whether it is a payment trail, data exchange platforms, or digital consent systems. For example, the commerce network India recently put a lot of infrastructure in the e-commerce space, the SME space, and the open connectivity data network. These infrastructures will find that a lot of fintechs who are trying to learn the existing gap have their business models called into question.”

This claim applied to the developing markets in Asia; Mohanty listed India, Indonesia, Japan, and Thailand as examples. He highlighted that the shift of infrastructure and better connectivity between businesses that will create innovation paths which are the building blocks for the future.

Singapore has connected its payment systems to UPI in India, to Vietnam, Malaysia, and is looking to connect to more countries before the end of the year. Mohanty’s said there were no limits or boundaries to Singapore’s collaborations: they are currently looking to connect countries in Africa and Latin America. Mohanty stated that there is a misplaced competition between fintech industries in different countries, and that fintech should not have any boundaries.

Commenting on the fintech industry in the UK, Mohanty added that the UK should consider a public infrastructure upgrade as there is a shift towards a global response to financial systems: “We have positioned ourselves in as open, interoperable, and an open to a coordinated global response when it comes to financial systems. Just recently we were talking about unified public ledger and Singapore wants to plug into that. We are talking about a coordinated response to digital currency: retail CBDCs, wholesale CBDCs, and tokenised deposit. These are big macro strategies to think about when it comes to innovation. This is all part of the coordinated global thinking.”

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