Leaders of innovation and technology from around the world are traveling to Singapore this week for the third annual Singapore FinTech Festival. The world's largest platform for the global fintech community, the Singapore FinTech Festival features a series of exciting events, including a Global FinTech Hackcelerator Demo Day, Artificial Intelligence (AI) in Finance Summit, FinTech Awards, an Innovation Lab Crawl, Workshops, and more. We sat down with Sopnendu Mohanty, Chief Innovation Officer at the Monetary Authority of Singapore (MAS) to learn more about the event, and how Singapore is using innovative technology to rewrite the capital markets and beyond.
Can you tell us about the Singapore FinTech Festival? How did the Festival originally come to life and what is your mission?
We started the Singapore FinTech Festival in 2016 to celebrate the accomplishments of the global FinTech community. As a global financial hub, and with a fast growing FinTech community, we believed we could create a platform to bridge the global financial and FinTech community, bringing them together to connect, collaborate and co-create.
The first festival saw over 14,000 participants from the banking and finance industry, tech players, investors, start-ups and anyone who was keen on learning more about FinTech. We are pleasantly surprised by the amount of traction we have gained, doubling to 30,000 participants last year.
This year, we've expanded the Festival to become a global knowledge platform that extends beyond Fintech to include topics such as LP investing, venture capital and capital raising strategies. We hope that the Festival will continue to become an increasingly global and inclusive platform for the FinTech community which includes international regulators, players within the FinTech and beyond the FinTech sector, policy makers and academics.
What excites you most about blockchain, and other innovative technologies present at the Singapore FinTech Festival?
Blockchain technology continues to fascinate me. The concept of asset tokenisation has created a whole new token economy, and we are only starting to understand its implications. It has been more than 2 years since we started on Project Ubin, and we are still learning something new and interesting with every phase.
A recent work was on developing Delivery versus Payment, or DvP capabilities for settlement of tokenised assets across different blockchain platforms. This enables the simultaneous exchange and final settlement of tokenized assets and currencies, even when they are on different blockchain networks. The immediate benefits are operational efficiencies and reduction of settlement risks.
But what amazes me most is how this innovation could be applied to even the non-financial sectors, and radically transform the global economy in the long run. Securities is just one form of tokenized assets. Imagine the possibilities of tokenizing other assets, including physical assets such as property and land titles. This could create new opportunities never imagined before.
Is there a specific use case for blockchain that interests you the most?
Cross-border payments is of particular interest, simply because they are so slow and expensive today. Our domestic payments network, such as FAST and PayNow, allow me to make a payment in 3 clicks, almost instantly and at no cost. Using that as a benchmark, there is so much opportunity for improvement with cross-border payments.
Payments in general is interesting for us, but the incremental benefits of blockchain for domestic payment is very limited. However, this is from a developed economy's perspective, where centralized systems work well. We have robust infrastructures, and we have trusted central parties, and there is simply little reason to move to a decentralized infrastructure.
If we view this from the lens of an emerging economy where they do not enjoy the same luxuries which we take for granted, the situation is very different. I believe the first large-scale implementation of blockchain for payments will be in an emerging economy. We are used to a paradigm of mature economies exporting technologies to emerging economies. In the blockchain space, I believe the reverse will happen. Emerging economies will find a strong compelling use-case, deploy the technology and leap-frog the rest.
There is hence a strong opportunity for partnerships between mature and emerging economies, and that is what we are doing. Our FinTech companies are capitalising on our wealth of expertise and capabilities developed through experiments such Project Ubin, collaborating with regional partners to co-develop and implement new solutions, and in the process, learn from each other's experiences.
What does innovation mean to you?
Innovation is about finding new and better ways of doing things. It could be to improve efficiency, reduce costs, lower risks, or create better products. The most important thing however, is that innovation must be purposeful, and that it must improve people's lives.
There is a common misconception that innovation is about doing something cool with the latest technology. The technology you use is only half of the story. Technology is an enabler, and new technologies enable new ways of solving challenges. Ultimately, how you use the technology is far more important, and many of the amazing FinTech innovations today are simply great ideas that have been executed brilliantly.
What advice would you give to young professionals who aspire to be in the FinTech industry?
The same advice to FinTech companies: start small, dream big, move fast. The FinTech industry is advancing so fast, there are no bad opportunities, only lost opportunities. Get yourself into a FinTech role, but do not be confined by it. Write your own job description. Think about what you should be doing with a 50% month-on-month growth, and work hard to make it happen.
How does MAS use technology to #rewritetomorrow?
As a central bank, it is not so much how we use technology, but our attitude towards technology that will #rewritetomorrow. We have a strong belief that regulations should not front-run innovation, and this has created space and opportunities for the financial industry to experiment, innovate, and use technology to provide better financial services and to manage risks better.
We also believe that policies and regulations are best made when we understand the technology and the innovation. As such, we have made practical experimentation a priority, so we know first-hand the risks and benefits of new technologies. We work closely with the industry to experiment and to co-create solutions, so we face challenges and overcome them together.