29 February 2024

2023 saw regulatory bodies supporting innovation and artificial intelligence (“AI”) growth, in addition to pushing forward with FinTech initiatives related to ESG and improving regulatory measures for consumer protection.

We are pleased to highlight the following three FinTech trends in Singapore in 2023 in this FinTech Update:

  • Spurring innovation and AI: Regulatory bodies introduced further support aimed at bolstering innovation in AI capability development:
    • The Monetary Authority of Singapore (“MAS”) committed up to S$150 million under the renewed Financial Sector Technology and Innovation Scheme, continuing support for advanced capability development and adoption.
    • MAS has laid out the foundation for the safe and innovative use of digital money in Singapore with the Orchid Blueprint, expansion of digital money trials, and a plan to issue a live central bank digital currency (“CBDC”) for wholesale settlement.
    • MAS launched the Financial Sector Artificial Intelligence and Data Analytics (“AIDA”) Talent Development Programme to increase the supply of AIDA talent to build deep AI capabilities in the financial sector.
    • MAS released Veritas Toolkit version 2.0, an open-source toolkit which enables the responsible use of AI in the financial industry.
    • The successful conclusion of phase one of Project MindForge resulted in the development of a generative AI risk framework.
  • Advancing sustainability: In 2023, as ESG concerns took centre stage in regulatory agendas, a number of sustainability-focused initiatives and platforms were launched.
    • MAS launched Finance for Net Zero Action Plan, setting out MAS’ strategies to mobilise financing to catalyse Asia’s net zero transition and decarbonisation activities in Singapore and the region.
    • The Secretariat of the Climate Data Steering Committee, MAS, and Singapore Exchange signed a Memorandum of Understanding to collaborate on strengthening access by stakeholders around the world to key climate transition-related data.
    • MAS issued its finalised Singapore Code of Conduct for ESG Rating and Data Product Providers and an accompanying checklist for providers to self-attest their compliance with the Code of Conduct.
  • Industry developments: The regulators made strides in the regulation of digital payment token (“DPT”) providers and financial institutions, in particular in relation to consumer protection.
    The industry also saw further developments in digital currency, asset tokenisation, and payments:
    • MAS proposed a framework for designing open, interoperable networks for digital assets.
    • New requirements for DPT service providers to safekeep customer assets were announced, followed by the finalised measures in relation to business conduct, consumer access, and managing technology and cyber risks for DPT service providers.
    • MAS finalised its stablecoin regulatory framework with features that ensure a high degree of value stability for stablecoins regulated in Singapore.
    • MAS and the Info-communications Media Development Authority sought feedback on a shared responsibility framework for phishing scams, with MAS separately seeking feedback on proposed revisions to the E-Payments User Protection Guidelines.
    • The stock cap and flow cap on personal e-wallets have been raised.
    • MAS published a whitepaper on purpose bound money proposing a common protocol to specify conditions for the use of digital money such as CBDCs, tokenised bank deposits, and stablecoins on a distributed ledger.
    • Asset tokenisation initiatives are set to expand, with plans to develop foundational capabilities to scale tokenised markets.
    • MAS also launched a proof-of-concept for an interoperable Singapore Quick Response Code Scheme.

More information can be found in our FinTech Update.

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