MAS' fintech chief touts gains from digital infra buildout
Asia is at the forefront in establishing the three layers of inclusion needed for full digital integration — social, financial, and economic, according to Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore (MAS).
The buildout of digital infrastructure in Asia is facilitating simpler and better business frameworks, he added.
“All this infrastructure is great news for the [financial] industry, because that kind of ticks our boxes with that level of complex policy alignment, and complex social issues around privacy or exclusion [from banking networks]. That allows a lot of innovation to take place at a quantum leap,” Mohanty said during a fintech panel discussion at the recent Milken Institute Asia Summit held in Singapore.
He pointed out that it is very important that the public sector and government financial regulator consider such public infrastructure as the precursor for any substantial or meaningful growth in this market.
“If you’re an investor, and if you’re looking at a market, one checklist you must have is whether the market has a foundational public infrastructure. If the market doesn’t, it will be inefficient, it will have short-term growth and it will have a lot of problems downstream. But if you’re betting on applications built on top of [this foundation], that’s a good bet,” Mohanty said.
BOOSTING DIGITAL FOUNDATIONS
Beyond each market’s digital infrastructure and growth, investors should also consider how the systems can connect with those in other markets.
Singapore launched an initiative to connect multiple countries’ public infrastructure across borders.
So far, PayNow — a service offered by participating banks that lets users send and receive Singapore dollar funds from one bank to another using a mobile number — has been connected to India’s equivalent instant payment system, the Unified Payments Interface (UPI), as well as Thailand’s payment system, PromptPay. A connection with Malaysia’s DuitNow is also in the works.
An international money transfer infrastructure that is safe and cheap will have clear impact potential, Mohanty argued.
There's little doubt that in Asia Pacific, Singapore is noted for its sophisticated digital infrastructure.
Even as it makes simple transactions such as money transfers for migrant workers simpler via digital means, at the other end of the spectrum, the city-state is also in the forefront to develop new-age digital assets and an accompanying framework.
Family offices previously told AsianInvestor that new investment opportunities may emerge as a result of schemes such as the framework for digital asset networks proposed earlier this year by MAS.
They said these opportunities would arise less as a result of the investment possibilities opened up by the technology involved in the proposed financial infrastructure, and more thanks to the value of the companies rolling it out.
The recent extension of Project Guardian, the MAS programme that aims to integrate tokenisation into Singapore’s financial system, reinforces the regulator’s tightly defined focus on the technological aspects of digital assets.
Drafted as a joint effort with the Bank of International Settlements, the plan involves 11 major finance sector players, including HSBC, Standard Chartered, DBS and Citi, testing tokenisation in wealth management, fixed income and foreign exchange.