Three key FinTech trends in 2024
As Singapore solidifies its standing as a global FinTech hub, the regulatory and industry landscape continues to be shaped with a focus on cybersecurity and the adoption of advanced technologies such as AI and quantum computing.
We are pleased to highlight the following three FinTech trends in Singapore in 2024 in this FinTech Update:
- Regulation of digital payment systems and asset tokenisation: The Monetary Authority of Singapore (“MAS”) has enhanced its regulatory framework to strengthen the oversight of payment services and asset tokenisation. Key developments include (i) the expansion of the scope of the Payment Services Act 2019 (“PS Act”) to include previously unregulated services related to domestic money transfers, cross-border money transfers, and digital payment tokens (“DPTs”),(ii) changes to compliance requirements under the PS Act, (iii) the introduction of user protection requirements for DPT service providers, (iv) new guidelines for licensing payment service providers to streamline processes for licence applications and to require independent audits for compliance readiness, (v) a public consultation on the proposed regulatory approach for digital token service providers, and (vi) the announcement of MAS’ plans to support the commercialisation of asset tokenisation with the establishment of the Global Finance & Technology Network and the continuation of initiatives like Global Layer One, Project Nexus, and Project Guardian.
- Strengthening cybersecurity and risk management: MAS has intensified efforts to mitigate cybersecurity risks and bolster consumer protection. Notable initiatives include (i) the implementation of the Shared Responsibility Framework and updated E-Payments User Protection Guidelines which set out the duties of service providers and consumers to mitigate phishing scams, (ii) revised guidelines on the provision of consumer protection safeguards by DPT service providers, technology risk management, cyber hygiene, quantum, and generative AI, and (iii) the launch of Singapore’s National Anti-Money Laundering Strategy.
- Advancements in AI and quantum technologies: Singapore continues to encourage the adoption of AI and quantum technologies in financial services. Key initiatives include (i) the commitment of S$100 million under the Financial Sector Technology and Innovation Grant Scheme (FSTI 3.0) by MAS to support financial institutions (“FIs”) in building quantum and AI capabilities, (ii) MAS’ collaboration with FIs and technology partners to trial quantum security solutions, including quantum key distribution, to address cybersecurity threats from quantum computing, and (iii) a trial featuring the first use of quantum-resistant cryptographic algorithms for the signing and encryption of emails conducted by MAS and Banque de France.
More information can be found in our FinTech Update.
