For many years now, Singapore has been widely regarded as a critical hub for companies that wish to establish a presence in the region, emerging as a serious contender against the better known geographies of Hong Kong and China. However, the Singapore Government is now shifting gears, taking the unprecedented step of launching an initiative that will actively transform the city state into a connected city - an innovation hub that is revered around the world as a Smart Nation.
Launched under the guidance of Prime Minister Lee Hsien Loong, the Smart Nation Programme aims to harness information and communication technologies, networks and data to increase connectivity, competiveness and productivity, improving the welfare of Singaporean citizens in the process. As such, the government is working to put in place the necessary infrastructure, policies, ecosystem and capabilities that will help achieve this goal, while also turning to the corporate world to help build and create new connected solutions, systems and platforms at the same time. As such, Singapore looks set to emerge as Asia's latest innovation centre.
Given the long-term goals of the government, it comes as little surprise that the Monetary Authority of Singapore (MAS) is keen to show support for the Smart Nation Programme. The MAS recognises that countries, businesses, and people who know how to use technology and innovate will have a keen competitive advantage, and they have identified five imperatives they believe will influence the future1. As such, many leading treasurers are exploring these imperatives to ensure their companies are in a position to move ahead of the competition as the dawn of the Smart Nation arrives.
The five imperatives identified by the MAS are as follows:
Digital and mobile payments – The world is fast becoming a cashless society with an increasing number of consumers and companies now making payments online or through their mobile phones, which clearly impacts the way in which consumers, businesses, corporates and banks pay for goods and services and manage accounts receivables.
Authentication and biometrics – Authentication is critical to life in the digital age, however user IDs and passwords are easy to compromise. As such, solid advancements are being made in the field of biometric authentication methods such as fingerprint, voice and iris recognition, which will be more secure and efficient than traditional means.
Block chains and distributed ledgers – Commonly associated with Bitcoin, the technology behind the crypto-currency has attracted much attention as a faster and potentially cheaper method of making payments than conventional bank transfers. The use of block chain and distributed ledger technology is likely to have a significant impact in the future.
Cloud and Software as a Service – This technology has begun to revolutionise the back office and IT functions in recent years. New entrants are using cloud technology to enter the market quickly, which has enabled companies to grow rapidly and quickly achieve economies of scale and efficiency, especially in the Financial Technology (FinTech) industry and start-up space.
Big data – Today's market is overwhelmed with data that is analysed to reveal patterns and trends that drive business growth. However, with so much data available, knowing what to look at and seeing the bigger picture can be challenging. Technologies are now available to harness the value of the vast amounts of data we are now generating.
The MAS is dedicated to creating a regulatory environment that supports these five imperatives, and as such they have established the Financial Sector Technology and Innovation Scheme (FSTI), which provides financial support to help progress in these areas. They are open to sponsor or co-fund banks, corporates and even start-ups that make progress in one of the following areas:
Singapore's continued development as an innovation centre will play a significant role in helping companies build their bottom line, not only on the ground in the city state but also further afield. The Lion City already enjoys a unique position as a leading trade and supply chain hub, regional treasury centre, and a global financial centre, and its proximity to the rapidly emerging ASEAN markets makes it an excellent location from which to build a regional base. Companies that participate in the FSTI will have a chance to incubate new solutions for the many emerging economies that surround Singapore, acting as a “forward base” for delivering solutions into the ASEAN region.
Companies that are legitimately making advancements in one of the three priority areas for the MAS may qualify for a grant to help them develop new technology. And if this is the case, it is essential that corporates begin to explore how they can arm themselves with the right tools and knowledge in order to demonstrate a culture of innovation in order to capitalise on what is clearly a significant initiative for the government of Singapore. As such, it will be critical that they choose a banking partner that can help them in terms of collaborating with other institutions and benchmarking against competitors for both talent and resources.
At the end of the day, the benefits of the Smart Nation Programme will only be realised in the months to come. However, smart companies are already partnering with leading financial institutions in order to demonstrate their support for the government's dedication to driving innovation in the FinTech industry.
1"A Smart Financial Centre" - Keynote Address by Mr Ravi Menon, Managing Director, Monetary Authority of Singapore, at Global Technology Law Conference 2015 on 29 Jun 2015