Bank for International Settlements to set up innovation hub centre in Singapore

THE Bank for International Settlements (BIS) will establish an innovation hub centre in Singapore, along with one each in Basel, Switzerland and Hong Kong.

In an announcement on Sunday on the setting up of the Innovation Hub, the BIS said the role of the hub will be to identify and develop in-depth insights into critical trends in technology affecting central banking; develop public goods in the technology space geared towards improving the functioning of the global financial system; and serve as a focal point for a network of central bank experts on innovation.

Chairman of the BIS board of directors, Jens Weidmann, said: "The IT revolution knows no borders and therefore has repercussions in multiple locations simultaneously. The establishment of the BIS innovation hub will enable central banks to extend their existing collaboration with a view to identifying relevant trends in technology, supporting these developments where this is consistent with their mandate, and keeping abreast of regulatory requirements with the objective of safeguarding financial stability. There are significant economies of scale in such an endeavour, and the BIS is the ideal vehicle to realise them."

The BIS is an international organisation that serves central banks and other financial authorities to build a greater collective understanding of the world economy, foster international cooperation among them and support them in the pursuit of global monetary and financial stability.

In first phase of the initiative to foster collaboration within the central banking community on fintech issues, the hub centres will be set up in Basel and Hong Kong, making use of existing BIS facilities there. Singapore will host the BIS third hub centre.

The Monetary Authority of Singapore (MAS) said in a statement on Sunday that the move by the BIS to set up an innovation hub centre in Singapore reflects the city-state's position as a leading international fintech centre, with an advanced fintech ecosystem. In collaboration with other central banks, the Singapore hub centre strives to develop the technology architecture for an efficient and secure digital global financial system and facilitate experiments in the application of technology to enhance financial regulation. The centre will commence operations as soon as the institutional arrangements such as location of premises, staffing and office infrastructure for its establishment have been finalised.

Ravi Menon, managing director of MAS, said: "A wave of technological innovations is sweeping across financial services. To fully harness the benefits of these innovations while ensuring the resilience of the financial sector, central banks must also innovate - to modernise the technology infrastructure and regulatory arrangements that underpin digital finance and the digital economy. The BIS innovation hub initiative provides a compelling platform for central banks to collaborate in this effort, so as to maximise the benefits of cross-border digital connectivity and commerce. MAS looks forward to working closely with the BIS and the global central banking community to advance this visionary and important agenda."

Hub centres will be added across the Americas and Europe in the second phase of implementation.