The Business Times

MAS to commit S$150m for FSTI scheme over next 3 years; consults on ending corporate cheques by 2025

Raphael Lim
Published Wed, Nov 2, 2022 · 01:34 PM

THE Monetary Authority of Singapore (MAS) will provide a third tranche of funding for the Financial Sector Technology and Innovation (FSTI) scheme, with a fresh commitment of S$150 million for the next three years, Deputy Prime Minister (DPM) Lawrence Wong announced on Wednesday (Nov 2).

Speaking at the opening of the Singapore Fintech Festival at the Singapore Expo, he also said MAS would be seeking the public’s views on ending the use of corporate cheques by 2025, given that the use of such cheques has already declined in favour of e-payments.

Wong noted that technology can enhance and empower, but “that doesn’t happen naturally and easily”.

MAS introduced the FSTI scheme in 2015, and has provided two rounds of funding. The first run awarded over S$100 million in grant funding for close to 500 projects; in the second round, more than S$200 million went towards funding more than 1,000 projects.

The focus of the third tranche will be on areas such as artificial intelligence, analytics, regulatory tech and cybersecurity, in addition to new areas such as ESG (environmental, social and governance) fintech. More details will come in the first quarter of next year.

The DPM also noted in his speech that electronic payments have been growing, even as the use of cheques has fallen sharply from 32 per cent of payments in 2016 to just 7 per cent currently.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

VIEW ALL

The continued reliance on cheques has resulted in suboptimal business processes and contributes to a relatively high cost of payments in the economy. Wong said: “We aim to eliminate all cheques and terminate central cheque clearing over the medium term.”

MAS launched a public consultation on Wednesday, with several initiatives to eliminate corporate cheques by 2025, which would bring down a “substantial portion” of the local cheque transaction volume.

But Wong noted that there are still individuals, especially seniors, who are still uncomfortable with e-banking and e-payments.

“To ensure that our e-payment journey is inclusive, we will provide a longer runway for individuals to switch to alternative payment methods,” he said. “This will also give us more time to consider the right solutions for those who are unable to adopt e-payments and look into the necessary transitional support.”

The DPM also announced that the Singapore Financial Data Exchange (SGFinDex) would be extended to include insurance policies.

SGFinDex is the world’s first public digital infrastructure that enables individuals to securely access their financial information held across government agencies, banks, insurers and the central securities depository. There are currently more than 30,000 monthly active users of SGFinDex, with nearly 1.2 million data retrievals.

Jacquelyn Tan, UOB’s head of group personal financial services, noted that their recent survey found that 80 per cent of Singaporeans indicated that sharing of financial data will help in financial planning.

She added: “With the next phase of SGFinDex, consumers in Singapore will greatly benefit from the addition of insurance data together with their consolidated savings and investment holdings.”

Prudential Singapore’s chief customer officer Goh Theng Kiat said: “Customers will now have a single view of their finances, including their insurance policies, which will better support them in understanding their protection gaps when planning for their future.”

Wong said: “Going forward, we hope to on-board more financial institutions on this platform, as well as a wider range of financial information for more comprehensive overview and greater convenience in financial planning.”

The government has also been looking at digital technologies to streamline and further improve business processes.

The MAS and the Ministry of Finance launched on Wednesday eGuarantee@Gov, which paves the way for businesses and individuals to provide a banker’s guarantee or insurance bond to government agencies digitally.

“In the past, the application process for such guarantees and bonds takes a few days. But with the digitalisation efforts, this can all be done online within a day,” Wong said.

While technology has helped tackle immediate challenges, new opportunities have emerged. Digital asset technology has been one such area.

“There should be no doubt that we are embracing fully the underlying technologies of distributed ledgers, and the potential that they have to transform financial markets,” Wong said.

The MAS launched Project Guardian earlier this year, to explore the potential of asset tokenisation with the industry. It said on Wednesday that the first industry pilot has completed its first live trades.

DBS Bank, JP Morgan and SBI Digital Asset Holdings have conducted foreign exchange and government bond transactions against liquidity pools comprising tokenised Singapore Government Securities , Japanese government bonds, Japanese yen and the Singapore dollar.

Han Kwee Juan, group head of strategy and planning, DBS, said the successful test lays the foundations for building global institutional liquidity pools that enable increased trading velocity, greater transparency, higher efficiencies, lower settlement risks and economies of scale.

“This test trade has demonstrated that by harnessing the power of blockchain, the standards by which financial institutions currently deal with each other can be transformed and reimagined for greater efficiency and transparency,” he said. “This provides a springboard for the industry to further opportunities in the trading world.”

READ MORE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to  t.me/BizTimes

Banking & Finance

SUPPORT SOUTH-EAST ASIA'S LEADING FINANCIAL DAILY

Get the latest coverage and full access to all BT premium content.

SUBSCRIBE NOW

Browse corporate subscription here