Singapore's financial industry should be able to operate effectively through the pandemic and prepare itself for new challenges and opportunities in the post-Covid-19 world, the central bank said.
Mr Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said it is going to take quite a while before a vaccine or treatment for Covid-19 is found.
"The virus is going to be with us for a while and, with it, the risk of renewed outbreaks of infections," he said in a video-conference during a charity event by financial markets association ACI Singapore last Friday.
Hence, the financial industry must prepare itself to operate in a safe manner which could include changes in office layouts and the way transactions are carried out, while taking into account public health considerations, he said.
Digitalisation of financial transaction has picked up pace, and the post-Covid-19 world is likely to be more digitalised. There has been more digitalisation in the last two months than people had expected to see over the next five years.
"This acceleration is going to be with us. Once people have gotten used to living digitally - remote working, e-commerce, tele-medicine - the economy and society are going to change in a variety of ways," Mr Menon said.
While Singapore's financial sector has embraced digital technology, institutions that adopt deeper end-to-end digitalisation and use digital platforms for business operations are going to have a strong competitive advantage, he noted.
Mr Menon also applauded Singapore's financial industry for its resilience in the face of Covid-19 and the strong investments the sector had made in digital transformation over the last five to six years.
"Imagine if there was no retail electronic payment system, or if there were no infrastructure for digital banking or selling insurance online or trading from home - we would be in a much worse situation today," he said.
Singapore's foreign exchange market has been resilient and was able to manage the volatility from the global impact of Covid-19.
The current situation is of course not without its challenges and many financial institutions have had to make significant adjustments to the new environment, he noted.
IF NOT FOR DIGITAL TRANSFORMATION
Imagine if there was no retail electronic payment system, or if there were no infrastructure for digital banking or selling insurance online or trading from home - we would be in a much worse situation today.
MR RAVI MENON, the Monetary Authority of Singapore managing director, on digital transformation over the past half decade.
Noting the new opportunities that have emerged due to the pandemic, Mr Menon said impact investing in healthcare companies and supply chain resilience and pandemic risk insurance could be some of the future growth areas.
"The financial sector is fundamentally in the business of risk management. Covid-19 represents the materialisation of an extreme kind of risk. To the extent there is greater recognition of risks of all kinds and consequent demand for effective risk management solutions, the financial sector will have an important role to play in the years ahead."