MAS has also officially launched its AI and data analytics guidelines
The digitisation of financial services in Singapore has been kicked up a notch today, with Singapore’s central bank, the Monetary Authority of Singapore (MAS), announcing a slew of fintech initiatives and updates at this year’s edition of the Singapore Fintech Festival.
First, the MAS and the Infocomm Media Development Authority (IMDA) is partnering up with six private sector partners to create a cross-border innovation hub called Business sans Borders.
The six partners are GlobalLinker, Mastercard, SAP, Yellow Pages, DBS Bank and Singtel — all of which service groups of small and medium enterprises in various capacities.
Through this new alliance, the six partners will help SMEs build digital solutions that will strengthen their ability to conduct cross-border and domestic trade.
The hub will also allow SMEs to do business with each other more effectively. For example, a logistics enterprise can use the hub’s network to reach out to more business customers easily.
The hub will contain the following features:
- A multi-ecosystem sandbox environment containing anonymised SME data so they can test out new digital services;
- An app store that offers various SME-targetted services such as human resources, logistics and finance.
- An Artificial Intelligence (AI) Engine to match SMEs with different suppliers of services and products across the ASEAN region.
According to a press release, the POC will also solicit involvement from interested startups as well as established industry players in developing technical frameworks and potential governance structures for the exchange of anonymised SME data.
“This pioneering hybrid data and solutions hub will be supported by innovative and relevant financial services and powered with self-learning artificial intelligence. We are confident that Business sans Borders will positively transform economies and propagate financial inclusion through ASEAN and beyond,” said Sopnendu Mohanty, Chief FinTech Officer, MAS.
A Proof-of-Concept (POC) version of the hub will be launched next year.
Collaboration through open API exchange
Today, MAS also said that the ASEAN Financial Innovation Network (AFIN)’s new API exchange (APIX) will be officially launched this Wednesday.
APIX is a fintech marketplace containing APIs developed startups. It will also feature a sandbox This means that financial institutions will be able to use startups’ APIs to strengthen their services, as well as collaborate with the startups to develop and experiment with new solutions.
Improving the KYC process
Last year, MAS said it was working with local and foreign banks to explore a shared services platform for doing corporate Know-Your-Customer (KYC) — a system by which banks obtain their clients’ information.
However, while they were able to “harmonise” various banking KYC systems, the cost of implementing this cross-border system was too high, so that project has now been put on hold.
Now, MAS and GovTech are working with financial institutions to gather government data more efficiently so they can assess an SME’s credit score.
Some SMEs do not have (or have insufficient) credit history, and that can be a hindrance if they want to apply for bank loans.
What MAS and Gov Tech will do is extract trusted data from government sources on the business and key individuals associated with the SMEs to build a more informed credit assessment.
They will run a pilot with three banks in the first half of next year.
Guidelines for an AI and data analytics-driven ecosystem
As financial institutions continue to upload and consolidate critical data (such as customer details) online to improve their KYC processes, it has become increasingly imperative to also develop stringent rules to prevent misuse of such information.
To that end, MAS has launched a seat of principles called Fairness, Ethics, Accountability & Transparency, or FEAT, to oversee the use of AI and data analytics by financial institutions.
MAS first announced that it was working on such a document in April this year. A committee, co-chaired by MAS Chief Data Officer, David Hardoon, and Hsieh Fu Hua, Co-Founder and Advisor, PrimePartners, was set up to prepare the guide.
“The FEAT Principles lay the foundation for a thriving AI and data analytics ecosystem. As the financial industry harnesses the potential of AI and data analytics on an increasing scale, we need to be cognisant of using these technologies in a responsible and ethical manner,” said Hardoon, in a press statement.
Some of the guidelines include ensuring AI and data analytics (AIDA)-driven decisions are conducted in an ethical manner that does not disadvantage individuals or groups; and that companies’ AIDA-driven decisions go through proper approval processes — either through its board members or internal and external authorities.
The FEAT principles also outline that companies will have to give full disclosure to individuals subjected to AIDA-driven decisions.
The FEAT document will be a set of guidelines that is continuously updated and renewed. It is not known how it will be enforced on companies, though.
For the full details of the document, click here.
Blockchain banking system progress
Last year, MAS and the Association of Banks in Singapore (ABS) said it was in the prototype and POC phase of building their distributed ledger banking system called Project Ubin
Today, MAS has unveiled new progress made on this project. It has successfully developed a blockchain-powered tokenised assets transaction system.
In simpler terms, buyers and sellers can use this system to conduct transactions quickly — and without risks.
This is because all transactions will be placed on an unalterable record on the blockchain system. So once a transaction has been initiated, the payment and goods will go to the seller and buyer respectively at the same time, and neither party can reverse or change the process — ruling out any chances of fraud.
MAS also announced it was working with the Bank of Canada to link their blockchain banking systems. This could ease cross-border payments between the two countries.
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