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MAS commits S$250m to further drive innovation, develop Singaporean fintech talent
THE Monetary Authority of Singapore (MAS) will be committing S$250 million over the next three years to enhance an existing scheme as part of efforts to accelerate technology and innovation-driven growth in the financial sector.
The enhanced Financial Sector Technology and Innovation Scheme, or FSTI 2.0, aims to encourage the expansion of the existing innovation labs and further develop Singaporean talent in fintech, said MAS managing director Ravi Menon, adding that it also took onboard industry feedback.
He announced the launch of FSTI 2.0 on Thursday at a virtual event that is part of the lead-up to the Singapore FinTech Festival that will be held from Dec 7-11 this year.
Out of the S$250 million committed this time around, almost half the sum was rolled over from the former FSTI scheme that was first introduced five years ago. Some S$225 million was committed under the FSTI from 2015 to 2020, but only half the sum was utilised.
The funding for FSTI 2.0 is made up from this remaining half that was rolled over, together with an injection of additional funds by the MAS, said Mr Menon.
Over 200 financial institutions and fintechs have tapped the FSTI scheme since 2015, which has contributed to the emergence of more than 40 innovation labs by financial institutions in Singapore.
Out of the innovation labs funded, about 180 "high-value" jobs were created, said Mr Menon. About 60 per cent of these are held by Singaporeans.
Among the enhancements to the scheme is an increase in support for early-stage experimentation of technology.
Under the existing Proof-of-Concept (POC) Grant, MAS will double the maximum funding quantum from S$200,000 to S$400,000, and will raise the maximum funding support from 50 per cent to 70 per cent of qualifying project cost.
The higher funding support will enable financial institutions and fintech firms to undertake larger-scale POC projects to experiment, develop and deploy innovative solutions, said MAS.
A merit-based tiered funding mechanism will also be introduced to replace the existing flat 50 per cent funding support of qualifying project cost, where a higher level of funding will be allocated to POC projects which demonstrate stronger merits.
The level of funding support and quantum cap for each applicant will vary according to the total number of favourable votes awarded by an evaluation panel.
The enhanced scheme also aims to strengthen the adoption of artificial intelligence (AI) within the financial industry.
MAS will raise the maximum funding quantum for all qualifying AI projects under the Artificial Intelligence and Data Analytics (AIDA) Grant from S$1 million to S$1.5 million, to provide greater push for financial institutions to implement innovative AI solutions.
In addition, MAS will introduce a new AIDA-Lite track, providing half the funding quantum of the AIDA track. With AIDA-Lite, financial institutions will be able to obtain funding support to adopt proven AI solutions to enhance their operations.
All AIDA applicants will be required by MAS to work with the Institute of Banking and Finance to "actively look out" for workers who might be at risk from the adoption of AI, and to develop a training plan to keep them employable, said Mr Menon.
FSTI 2.0 also seeks to ramp up the pipeline of Singaporean talent for fintech.
At existing innovation centres, MAS will co-fund 50 per cent of incremental Singaporean hires in qualifying roles for a period of 24 months.
All new projects under the financial institution-level projects, industry-wide projects and AIDA tracks will now qualify for funding support for capability transfer-related training costs. Such training costs include expenses incurred to engage specialists to train the local talent pool, as well as expenses incurred to send local employees for overseas training.
These training programmes will help to support workforce transformation in the financial sector and accelerate skills and knowledge transfer to Singaporean talents, said MAS in a statement.
"It's a journey of continued innovation and experimentation, deepening our local talent pool in new technologies," noted Mr Menon. "The most important – better serving our societies, here in Singapore and across the world."
For the first half of the year, the fintech sector in Singapore continued to attract equity funding and mergers and acquisitions amounting to S$650 million, despite the Covid-19 pandemic. Last year, fintech firms attracted a record S$1 billion of investment.
There are now more than 1,000 fintech firms in Singapore compared with about 50 five years ago. MAS estimated that there are nearly 10,000 people employed by fintechs in the Republic.