To give an impetus to innovation in financial technology (fintech), Monetary Authority of Singapore (MAS) will help startups in this field to test their products and solutions over a fixed period of time in a regulatory ‘sandbox’, where regulations are temporarily suspended or relaxed.
In addition to this, Singapore’s central bank will also be pumping SGD35 million to help smaller banks and insurers make use of regulatory technology or regtech.
Ong Ye Kung, Education Minister and MAS board member, announced these measures while speaking at the Singapore Fintech Festival today. These steps have been taken by the central bank to help financial institutions overcome regulatory pains.
MAS will also launch a public consultation exercise on the creation of a new sub-scheme called the Sandbox Express.
“This express version of the regulatory sandbox aims to get new fintech firms to start experimenting their solutions within 21 days, but it will only be for activities where the risks are low or well understood by the market as well as regulators,” said Ong.
The Sandbox Express is suitable for activities where the risks are generally low, or well understood and could be reasonably contained within the specific pre-defined sandbox. As a start, it will include sandboxes specifically pre-defined for insurance broking, recognised market operators and remittance businesses.
Each pre-defined sandbox will have its boundaries, expectations and regulatory reliefs pre-determined. The applicant must declare that it is able to fully comply with all expectations of the pre-defined sandbox that it has applied for, which includes providing clear disclosure and obtaining an acknowledgement from the user before the user can be on-boarded as a customer,” said MAS in a press release issued today.
MAS will assess applications based only on two criteria – (i) technological innovativeness of the financial service, and (ii) fitness and propriety of the applicant’s key stakeholders. The applications will be fast-tracked, with approval decisions granted within 21 days. An approved pre-defined sandbox entity will be required to submit periodic progress reports to MAS as well as ensure that the pre-defined sandbox expectations are adhered to.
Speaking about the new regulatory sandbox with fast-track approvals, Sopnendu Mohanty, Chief FinTech Officer of MAS, said, “To facilitate quicker experimentation and faster introduction of innovative financial services to the market, we are now offering the option of Sandbox Express.”
Interested applicants must be able to provide a clear disclosure and obtain acknowledgements from users of their products and solutions before these users come on as customers.
The public consultation will run from November 14 to December 13 this year.
Ong also emphasised that there is a need to bring in foreign expertise in the field of fintech because Singapore, being a small country with a small population, “will not have enough expertise in many areas of specialisations”.
“Hence we believe we have to complement our local talent with foreign expertise — grow our own timber, but also welcome experts around the world,” he added.
Ong also spoke about the education system of Singapore which brings out the best in the child.
“More than 90 per cent of our students progress to post-secondary education – in the vocational institute (ITE), polytechnics or universities. In some universities, computational thinking, digital literacy and quantitative reasoning have become compulsory modules,” he said.
“The entire curriculum is changing. More inter-disciplinary learning, fewer lectures, fewer tutorials, more projects, prototyping, internship, overseas exposures, community immersion, entrepreneurship stints. Education is now more of an experience,” he added.