Singapore FinTech Festival to see instant cross-border payment advancements
Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS), expressed strong interest in leveraging artificial intelligence (AI) to combat money laundering, stating its potential role in enhancing surveillance and strengthening the financial system.
Menon highlighted AI’s ability to process extensive data sets beyond human capacity, pointing out its current use in fraud detection and data analytics at MAS.
Expanding on the importance of AI in addressing money laundering, Menon stressed the necessity of a more comprehensive approach to overseeing financial institutions. He noted the significance of connecting disparate dots across various financial entities and highlighted AI’s potential integration within COSMIC—a digital platform enabling information sharing among financial institutions to identify suspicious transactions or customers.
Moreover, Menon underlined the need for AI’s contribution in examining voluminous data submitted by financial bodies, further emphasising the importance of AI, including generative AI, in providing a comprehensive view of potential risks.
Balancing AI Advancements with Caution
As Singapore gears up for the FinTech Festival, MAS explained the pivotal role of AI in financial services, with Menon acknowledging AI’s transformative potential. He explained the need for a balanced approach to managing the benefits and risks associated with AI, cautioning against ignoring potential drawbacks while embracing its advantages.
“We are on the cusp of something quite big and transformative,” he added.
He also noted that generative AI, which first emerged a year ago, has seen “the fastest rate of adoption compared to any other technology in history.”
“Like all technologies, AI brings great promise and great peril. We need to be realistic in appreciating both sides. How can we harness the benefits, and not get too scared about the risks? At the same time, we can’t be too wide-eyed about it and ignore some of the risks.”
Advancements in Financial Services and Sustainability
The upcoming FinTech Festival is expected to witness announcements enhancing various financial aspects. For instance, MAS plans to launch the integration of Singapore’s PayNow system with Malaysia’s DuitNow, aiming to facilitate instant cross-border payments.
In terms of sustainability, MAS will present the next phase of Project Greenprint, focusing on acquiring trustworthy sustainability data.
Menon also expressed the challenges in achieving instant settlements in cross-border transactions and shared the potential role of central bank digital currencies in addressing this issue, citing experiments with various entities to improve cross-border settlements.
“What we have done with India, Thailand, and Malaysia is real-time payments. That means the accounts of the two parties are updated, and you can spend the money you receive.
“But the banks have not settled the trade – that takes two days or so – and this is a major source of inefficiency and cost, and that’s where most of the bank charges come in.
“So, we need to also bring about instant settlement, which is not easy with cross-border payments,” he said. “That’s where the use of central bank digital currencies comes in.”
At 59, Menon, the longest-serving Managing Director of MAS, reflected on his extensive career at the central bank, noting the satisfaction derived from the successful upskilling of the financial sector’s workforce.
“Despite the rapid digitalisation in financial services that we all thought would lead to a lot of job loss … that, on the contrary, there’s been net job creation above our targets – that is deeply satisfying.”
Despite stepping down in January, Menon remains optimistic about contributing to areas like technology and innovation, social inclusion, and sustainability, ruling out a career in politics as his route for contributing to society. He is “looking forward to being gainfully unemployed” but not for too long as he wants to contribute to technology and innovation, social inclusion and cohesion, as well as climate change and sustainability.
Manpower Ministry’s Permanent Secretary Chia Der Jiun will succeed Menon as managing director (designate) on 1 November and managing director on 1 January.
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