Published Date: 15 November 2018

"Singapore: The Living Lab" - Speech by Mr Ong Ye Kung, Minister for Education and MAS' Board Member, at the Singapore FinTech Festival 2018 on 14 November 2018

Ladies and gentlemen,

1     Welcome to the world’s largest FinTech festival.

a) Our Festival is getting bigger. This year, we have about 40,000 participants –  one-third more than last year.

b) This year, we also hope that we’ve made your experience better – richer in content, and even higher in quality.

c) We have also put greater focus on issues that will interest you more – ASEAN, Financial Inclusion, AI in finance.

Encouraging Signs in Our Young FinTech Journey

2     FinTech is relatively new in Singapore, but we are on a promising journey, and the entire sector is bubbling with excitement in Singapore.

a) People coming together.

b) Ideas are hatched.

c) Companies are formed.

d) Jobs are created.

e) Solutions are found to solve real problems.

f) The entire FinTech Festival epitomises what is happening here.

3     Let me share the stories of three FinTech firms in Singapore:

a) M-DAQ –  it is in the business of foreign exchange, helping enterprises pay and collect monies from their partners overseas, as well as manage FX risks

b) Silent Eight – it is using AI to fight financial crime and is working with several global financial institutions.

c) Thin Margin – it is changing the concept of money changing to give clients better rates and greater convenience

Let us take a look at what the founders have to say.

4     Wonderful, inspiring stories. Today I stand here facing quite tough competition. Because earlier this morning, PM Modi said “Come to India”. And just now, the central bank governor from Kenya said “Come to Kenya”. Now, I am telling you, “Come to Singapore!”.

5     These are three companies, out of many, that have decided to come to Singapore. Why did they decide to build on their dreams in Singapore?  I think there are three main reasons, which is what I want to talk about today.  

First, Singapore is a Great Place

6     Singapore is not a place just for Crazy Rich Asians. You don’t have to be rich, you can lead a fairly comfortable and affordable life here. It is a city for everybody.

a) The best way to think about Singapore, is to think of us geographically. We are at the crossroads of the world – the Eastern-most fringe of the Indian Ocean, the Western-most fringe of the Pacific Ocean. This is where the sea lanes of communication converge. We are a node in this convergence.  This shapes how we think and who we are.

b) Here in Singapore, it is safe and things works.

i. Whether it is transport, healthcare, public education. Everything works well. If it doesn’t work, we will fix it.

ii. Rule of law and security are taken very seriously.

iii. So much so that President Donald Trump and Chairman Kim Jong Un chose to meet here.

c) We have a diverse culture and you can see that in our food, art, entertainment and our people.

i. People from different religions, backgrounds and cultures truly respect each other. Every minority has its own space to practice their religion and culture. At the same time, people respect each other and the common space we have as Singaporeans.

ii. So much so that we decided in our early years of independence that we shall use English as our main mode of working communication.

d)     We also understand this city is all we’ve got, so we have to cherish it

i. We are one of two rare cities where you find nature reserves in the middle of the city – the other is Rio de Janeiro. If you walk in our nature reserves, you will see more varieties of flora and fauna than the whole Europe combined.

ii. We reclaimed land to make part of the sea to become a reservoir – 1/6th the size of Singapore. Over time, salt water become fresh water.

iii. We turn our rubbish into dust by burning them and created an artificial island out of it, Pulau Semakau. Today, it is an island of greenery with flora and fauna.

7     Most importantly, this is a great place to start a business.

a) We are a node in Southeast Asia, a significant market– 650 million people, a rising middle class, fairly high mobile and Internet penetration, with a lot more headroom for growth. There is plenty of growth opportunities in the ASEAN market.

b) We are a great spring board to the region –  there are 1,300 financial institutions and every major global bank operating in Singapore.

i. These FIs may be traditional players but they are also Fintech firms. They want to collaborate with fellow FinTech players and with start-ups, or be your customer.

ii. Take for example the three stories we just saw. Silent Eight and M-DAQ did well in Singapore because they first started working with traditional and established FIs.

iii. And there is also a supportive industry around FinTech– angel investors, venture capitalists, private equity, IT companies, management consultants and head-hunters. There is a whole ecosystem around FinTech.

c) Besides being a springboard to ASEAN, we are also a springboard to the world.

i. We have been busy forging free trade agreements for 20 years. This was before we had trade wars and uncertainties about the multilateral trading systems. We know that as a small country, we need trade to survive, and trade politics can be difficult.

ii. So Singapore makes sure that we have access to all our main markets. Today, we have FTAs within the ASEAN region and the bigger Asian region – China, Japan, India, South Korea, Australia, New Zealand. Further afield, the US, Canada, Mexico and soon, the EU once the FTA has been ratified.

iii. MAS has been developing connections through a network of 25 FinTech Co-operation Agreements with counterparts in UK, US, Japan and many of our ASEAN neighbours.  Through these agreements, you can better enter these markets and navigate the regulatory landscape of these overseas markets.

d) Within this small space, we plan our city well. There will be space for you to set up here.

i. We have set aside 100,000 square feet in a FinTech Hub in the middle of the city on Robinson Road to ensure you have the physical space.

ii. Every University has incubator space and they will welcome you too.

Second, We Are Open to Ideas

8     Our whole existence as a city state boils down to that attitude: we are prepared to experiment, we are open to ideas, we try solutions that others may not have tried before.

a) This is how we built up our armed forces, ensure water sufficiency, control traffic congestion, forge racial harmony, provide public housing – we learn from others, build upon the lessons, and try new solutions. If it fails, we try again.

b) Experimentation is in our blood. This is why big tech companies are doing interesting things here.

i. Google is working on its Next Billion Users project in Singapore.

ii. Alibaba has many research centres in China. But when it decided to have its first research centre outside of China, they built two – one in Silicon Valley and the other in Singapore, with the Nanyang Technological University.

iii. Grab has its global innovation hub at the National University of Singapore.

iv. Mastercard is housing its largest innovation lab in the world in Singapore, to find the next digital payment breakthrough.

v. And still others – PayPal, Siemens, Dyson and HP – they are all building their research and innovation hubs here.

9     MAS is committed to support experimentation and innovation. Two examples of this at work:

a) One, MAS encouraging our FIs to use RegTech – using technology to help FIs overcome their regulatory pains

i. One of those pain points is submitting reports and providing data to the regulator.

ii. Last year, MAS announced that we will transform the way we collect data from FIs – data must be machine-readable, and in time, we want zero duplication of data requests.

iii. We are setting aside S$35 million to help smaller banks and insurers make use of RegTech. More details will be announced in the coming months.

b) Two, the longstanding regulatory philosophy of making good use of ex-post supervision vs ex-ante regulation. This means that when a new idea comes along, we want to say “start first”. After you start, we will observe and see how we can optimise the regulation.

i. One good example of this is the regulatory sandbox. This is where regulations are suspended, and allows firms to test their ideas with real customers in a fixed period of time.

ii. This is a learning experience for both the FinTech companies and MAS.

iii. Some people have said the Sandbox is too hard to get in. We will push this approach further.  Today, we will launch a public consultation to seek industry’s views on the creation of the Sandbox Express.

iv. It will make it easier to get into the Sandbox. 21 days – that will be our target.

v. This will be for activities where the risks are low or well understood. We can relax the system and allow tests and experiments to happen more quickly. 

vi. Some think maybe that is still not good enough and prefer something more laissez faire – but we are not that kind of regime. We regulate to harmonise concerns in the urban environment. That’s why whatever works in Singapore, it most likely can work in most other urban environments. If it works here, it has credibility all over the world.

10     A good example is our ePayment system.

a) It did not go the way of certain laissez faire regimes – where the system can grow so fast, it takes over the entire financial system and bypasses traditional financial services. Although it is convenient, it gives rise to prudential concerns. They are close loop systems that do not encourage inter-operability and overtime, stifles competition.

b) So when it comes to ePayment, we decided very consciously to take a bit more time but make sure ePayment is open architecture. So ePayment in Singapore is rather unique.

i. First, it works like any other ePayment in the world, where you can transfer funds using mobile phone number or ID number of the recipient.

ii. But what is different is the backend – it rides on a national inter-bank funds transfer infrastructure called FAST.

iii. Which is opened up for non-banks to participate.

iv. On the front end – we have a common QR code regardless of payment modes and wallets. It is the first of its kind globally.

v. So one ePayment system with one common backbone, one common QR.

vi. We want to get it right because payment is fundamental –  we all use payments and we use it in every sector of the economy.

vii. By ensuring open architecture and interoperability, we encourage competition, and over time, promote innovation.

viii. Therefore, laissez faire does not equal innovation in our context.

Third, We Believe in Skills and Talent

11     To innovate, create new jobs, in an area like FinTech, we need a broad range of talent.

a) Because FinTech is neither all Fin or all Tech.

b) Not all Fin – AI for security in FIs can be applied in a variety of sectors. ePayment functions ride and serve many other services, from games to retail to social networking.

c) Not all Tech – Beyond techies, you need people who can market, raise funds, anthropologists, psychologists, artists, designers, HR experts.

d) We need a whole talent ecosystem.

12     That’s why the most important support is our education system, because that’s how we develop our talent.

a) Education cannot just be about rote learning and acing exams.

b) We need to nurture curiosity and joy of learning, because how else are you going to keep learning your whole life to keep up with advancement of knowledge and technology? You need to have that passion and hunger.

c) Fortunately, since 1997, we have been moving education to an inquiry-based approach. You are required to work in teams, be hands-on and solve real problems. This is more likely to trigger joy and curiosity in our children.

d) Recently, we removed 1 out of every 4 examinations to make time for more inquiry-based and more hands-on applied learning, to nurture the interest and joy of learning.

e) We don’t believe in forcing all our young to learn coding, because there is a chance that by the time they enter the workforce, the language becomes outdated. Instead, we focus on teaching them the fundamentals – values, literary, numeracy.

f) So in maths, our focus is on problem solving that exercise our young in computational, analytical and logical thinking.

i. Here’s an example of a typical math problem that 12- year old student in Singapore will solve.

ii. Edwin has $190 less than Mary. After Edwin spent $20, the amount he left was 5/12 of Mary’s money. How much money did Mary have? The problem sounds difficult but all our children are taught how to visualise the problem, decompose it, solve it step-by-step.

g) This is an open-source curriculum and is adopted by many countries. They improve upon it and we, in turn, learn from them. That is an open architecture. 

h) Our students have done well.  They came in first in all four domains of international PISA tests in 2015 –  for 15-year olds, number one in maths, science, reading and collaborative problem solving.

13     Higher education is transforming as well.

a) More than 90% of our students progress to post-secondary education –  in vocational institute (ITE), polytechnics or universities.

b) In some universities, computational thinking, digital literacy and quantitative reasoning have become compulsory modules.

c) The entire curriculum is changing. More inter-disciplinary learning, fewer lectures, fewer tutorials, more projects, prototyping, internship, overseas exposures, community immersion, entrepreneurship stints.  Education is now more of an experience.

d) Hackathons are getting popular.

i. 5 polytechnics launched an API Hackathon this year.  130 students developed FinTech prototypes, best of which are showcased at this Festival.

ii. Tomorrow, PM Modi and I will witness the unveiling of winners of the Singapore-India Hackathon.

14     Because of that we are seeing interesting FinTech start-ups spinning off from Universities.

a) One example is Zilliqa – a spin-off from NUS. It is founded by NUS Computing researchers and is transforming the world of blockchain through ‘sharding’, a concept developed at the university. ‘Sharding’ divides a blockchain network into “shards” that can process transactions at the same time, that way they can enhancing scalability and energy efficiency of cryptocurrency mining. They surpassed a US$1 billion market cap in May 2018.

b) Another company is Funding Societies – co-founded in 2015 by NUS alumnus Kelvin Teo.  Today, it is the leading peer-to-peer financing platform in Southeast Asia.  The company has crowdfunded more than S$285 million in loans. In 2018, the company was listed on KPMG’s Fintech100 list.

15     Our young will no doubt be prepared well.  But we are also upgrading all our adult workers, through a nation-wide movement called SkillsFuture.

a) Our universities are transforming themselves – not just education institutes for the young, but for everyone.  They are transforming themselves into institutes of lifelong learning.  NUS now enrols students not just for four years for a degree but for 20 years. Graduates are welcomed to come back and learn new skills.

b) Total training hours for adults have increased drastically– from 26.7 million in 2013 to 41.1 million in 2017.

c) A large part of increase is driven by tech training, including data analytics, cybersecurity, agile software development and more.

d) We are even going to the community, teaching IT illiterate citizens how to use digital tools.

e) This will not make them tech experts, but they can become smart users.

f) We are retooling an entire working population to support our economic transformation.

16     A final point on talent and skills – for a small country and small population, we will not have enough expertise in many areas of specialisations.

a) Hence we believe in complementing local with foreign expertise – grow our own timber, but also welcome experts from around the world.

b) And if there is a capability we do not possess, we welcome international experts to teach in our Polytechnics and Universities.

c) That way, we can better grow businesses, open up more opportunities and create jobs in Singapore.


17     In summary, three answers to the question ‘Why Singapore?’

a) Singapore is a great place.

b) We keep an open mind to ideas.

c) We believe in skills and talent.

18     These makes us a living lab.  This is where you get things to work in a complex, sophisticated, well-regulated but business-friendly environment.  If it works here, it can work elsewhere in the world.

19     I hope I have convinced you. If you are still not convinced – it’s okay. I hope you enjoy your stay in Singapore. Take a look at our airport, try out SIA and eat some durians.

20     Have a good afternoon. Thank you.