POSTED 8 Jul 2019 - 10:47

How do you see the impact of digital banks in Singapore?

What potential risks should we watch for?
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Top Response

Max Loh, Country Managing Partner, Singapore and Brunei, EY

In issuing digital bank licences, Singapore has reaffirmed itself as a leading example of regulators collaborating with industry players, ecosystem partners, and potential entrants to the market to promote innovation and create choices for consumers. Consumers aren't the only beneficiaries. The...

Responses

Dileep Nair, Independent Director, Thakral Corporation Limited
8 Jul 2019 - 10:59

Singapore has bold Smart Nation aspirations. But we seem slow in allowing digital-only banks even though these already operate in many Western countries, China, Japan and South Korea. No doubt our traditional banks do offer digital services but it is the digital-only banks - without brick-and-mortar branch overheads as well as legacy systems - that are able to pass on the benefits such as higher interest rates to depositors, 24/7 customer support, bespoke notifications and other value-added services. Most important is the innovation that such entities spur within the banking industry.

Of course, regulatory requirements must be fully met by the virtual banks. Trust must also be there for the public and businesses to use their services. If such trust is based purely on brand-recognition of any “tech giant” behind the bank, care must be taken to ensure the financial solvency of that tech company. It pays to remember the dotcom crash in early 2000.

Vikas Nahata, Co-Founder and Executive Chairman, Validus Capital
8 Jul 2019 - 10:58

Digital banks have the ability to transform Singapore's banking and financial services, creating a more competitive landscape for new, innovative products and services that better serve consumers and businesses.

As Validus continues to drive financial inclusion for South-east Asia's SMEs, we naturally welcome this positive development and will be applying for a digital banking licence with MAS. Our strength in using technology and data, as well as forming strong partnerships with banks and corporates, positions us well to create a 360-degree solution tailored to SMEs. We believe that Singapore's financial ecosystem will be able to benefit and develop trust in digital banks as long as they have the right partners, talents, data security and infrastructure in place.

Rakesh Krishnamutim Country Manager, Singapore, PayPal
8 Jul 2019 - 10:57

As a global leader in digital payments, PayPal sees the rise of digital banks as another major impetus in the nation's drive towards a more cashless society. Digital payment platforms have long empowered small business owners and freelancers to tap into cross-border opportunities. Similarly, digital banks will bring more economic opportunities for merchants. As for consumers, they will also have more choices when it comes to accessing financial services. This is a positive development, and we believe these new market participants will help build and grow the fintech ecosystem, enabling Singapore to become a smart nation.

Sandie Overtveld, Vice President, APAC, Zendesk
8 Jul 2019 - 10:57

Digital banks are quickly becoming the Ubers of the banking industry. They are putting the customer back at the centre of their business model, and have the power to scale and accelerate the way we transact and manage our money at a rapid pace. In Singapore, the impact will be similar - it will drive traditional banks to break free from legacy infrastructure and archaic processes and become more agile and responsive to customer needs and expectations. We are already seeing these shifts in markets like Australia with the launch of Xinja, and Starling in the UK.

I believe the benefits far outweigh the risks, with the biggest risks being not keeping up with this new pace of change, and failing to learn from the past and remembering what made banking inherently difficult and frustrating. Whether you are a traditional bank or a digital one, the new measure of success will be constantly improving the customer experience.

Sanjay K Deshmukh, VP and MD, SEAK, VMware Singapore Pte Ltd
8 Jul 2019 - 10:56

The new digital bank licences mark the next chapter in Singapore's banking liberalisation journey and a great forward-thinking step that can create an innovative, resilient and competitive environment while maintaining trust and stability - hallmarks of the Singapore banking system.

Fundamental to progress is the right infrastructure and the right approach. While a pragmatic paced-out approach will strengthen the resilience of the banking system, businesses should continue to prioritise on leveraging the right digital foundation that can help them create new value, protect branding and trust, and transform engagement through technology platforms to empower our businesses to go farther, faster.

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Max Loh, Country Managing Partner, Singapore and Brunei, EY
8 Jul 2019 - 10:55

In issuing digital bank licences, Singapore has reaffirmed itself as a leading example of regulators collaborating with industry players, ecosystem partners, and potential entrants to the market to promote innovation and create choices for consumers. Consumers aren't the only beneficiaries. The economic impact is much wider as SMEs, who form the backbone of Singapore's economy, could be among the biggest winners. With more banking service providers, SMEs potentially get more diverse services with more competitive pricing. Customers will be looking for guarantees of financial and data security, user-friendly interfaces and quick fixes to issues that may arise. Digital banks will have to work on addressing attendant risks so as to earn customers' trust.

Teong Eng Guan, Vice President, ASEAN, Palo Alto Networks
8 Jul 2019 - 10:55

Digital-only banks present an opportunity to address customer needs currently unmet by incumbents. Through their differentiated business model, users will have easier access to a wider range of financial services. While there is great potential for these new entrants to flourish, as they have in other parts of the world, securing sensitive data remains a top priority. Digital-only banks will have to be proactive in addressing security issues in order to gain the same level of trust and credibility and compete with incumbents, who typically have more resources and experience dealing with cyberthreats.

Song Tang Yih, Vice President, APAC Sales ,A10 Networks
8 Jul 2019 - 10:54

Digital banks will have a positive economic impact for Singapore. It will power startups and smaller businesses while further strengthening Singapore as Asia's leading financial and technological hub. However, these achievements will also put a target on our backs for cyberattacks, especially as the nation transitions towards hyper-connectivity with 5G.

Already this year, we saw a state-sponsored attack against Chilean ATM networks - a chilling reminder of how cyberthreats will only evolve as the industry goes digital. With the rise in multi-vector attacks and the chronic shortage of qualified security professionals, the economics of cyberattacks are very much slanted in favour of the attackers.

Digital-first businesses today need more efficient tools and advanced technologies to balance this equation. This includes machine learning algorithms and heuristic behaviour analysis that can identify attack patterns. They must also deploy intelligently automated defences that can accomplish tasks autonomously. Manual intervention response time will be too slow, resource-intensive, and ineffective - resulting in greater potential of network downtime and high costs to the organisation.

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