Regulators play vital role in creating environment that fosters innovation

THE Committee on the Future Economy (CFE) has noted that the government needs to create a regulatory environment that supports innovation and risk-taking. Regulators need to place safeguards against risks inherent in the new industries while still enhancing the ease of doing business. On the face of it this apparently contradictory approach involves balancing the need for innovation with the outcome.

A good example of this can be seen in the very traditional and heavily regulated financial services sector which is being transformed by disruptive technology. The Monetary Authority of Singapore (MAS), as the industry regulator, has to ensure innovation and risk-taking thrive while the fiduciary responsiblity of the industry players remains intact. It is doing this by providing a "regulatory sandbox" environment for new experiments with technology.

Fintech (financial technology) companies are transforming financial services in unprecedented ways and encroaching into some of the most profitable markets for banks. Other technology disruptions are changing the way customers interact with their bankers. Smartphones and cloud computing have made digital banking mainstream and customers want anytime, anywhere access to their banking needs.