MAS announced that it is working with financial industry partners to create a framework for financial institutions to promote the responsible adoption of Artificial Intelligence and Data Analytics (AIDA). The framework, known as Veritas, will enable financial institutions to evaluate AIDA-driven solutions against the FEAT principles.
Response to two letters on Digital Banks - The Straits Times, 9 and 12 September 2019
We thank Mr Ramamurthy Mahesh Kumar and Mr Phua Kok Hee for their letters (“MAS needs to educate public on digital banks”, 9 September 2019 and “How will digital banks handle customer problems”, 12 September 2019).
We agree it is important that the public understands the differences between the new digital banks and existing banks in Singapore. Most banks here have enhanced their digital service offerings to customers, alongside physical branches and ATMs. The new digital banks will leverage their track records in successful technology-related businesses and incorporate innovative use of technology to serve customers and reach under-served segments of the market.
Mr Ramamurthy asked how digital banks will fulfil key regulatory requirements such as deposit insurance, and customer due diligence. Digital banks need to meet the same regulatory standards as existing banks. Deposits in digital full banks, which will serve both retail and non-retail customers, will be covered by Singapore’s deposit insurance scheme. Customer due diligence is already being done digitally today by existing banks using MyInfo, a service provided by the Government that enables individuals to confirm their identity and share personal information digitally.
Both Mr Phua and Mr Ramamurthy enquired about digital banks’ customer service. Digital banks can utilise online channels to handle customer enquiries or complaints. They will also be allowed to operate one place of business, which can provide a face-to-face channel to interact with customers. MAS expects all financial institutions – digital or otherwise - to deal with their customers in a fair and clear manner and handle customer feedback effectively and promptly.
To minimise risk to retail depositors, digital full banks are required to adopt a phased approach in scaling up their operations. MAS will assess various factors, including how the digital bank manages its risks and resolves customer concerns, before allowing the bank to expand its operations.
Digital banks will spur further innovation in the banking industry and provide greater consumer choice. To help Singaporeans learn about and benefit from the digitalisation of banking services, MAS has been working with stakeholders, including the media, to publicise the digital bank initiative. We will consider additional avenues to broaden our outreach and look forward to receiving concrete suggestions on how to do this better.
Jerome Lee (Mr)
Director (Corporate Communications)
Monetary Authority of Singapore