They have partnered with FinTechs to harness the capabilities of new technologies and deliver more customised solutions. For example, UOB has partnered with Personetics to use artificial intelligence to identify individual transaction demands and enable UOB to provide customers with real-time and personalised guidance on their financial decisions. Second, they have built digital banks in overseas markets, leveraging a lower-cost operating model to quickly acquire new customers. For example, DBS launched digibank in India and managed to acquire over 2.5 million customers in its initial two years of operations. The bank has also recently replicated its digibank strategy in Indonesia. DBS was ranked by Euromoney as the world’s best digital bank last year. Third, they have adopted more customer-centric approaches, integrating solutions for their financial and non-financial needs. For example, OCBC has built a niche marketplace to provide curated products and services for mothers and their babies. The bank also launched the OCBC Silver Years programme to provide seniors a one-stop solution for financial advice, insurance products and lifestyle options. 28. Digital challengers with innovative business models can add diversity and choice to banking systems. They can often serve the needs of traditionally underserved segments, such as the credit gap faced by young and micro-enterprises. They could also bring with them deep digital know-how and insights from operating non-bank businesses. In China, for example, MYBank, has broadened financial inclusion, with 80% of its clients being first time borrowers like mom-and-pop shops. 99% of its customers repay on time.

Innovation in finance is not an end in itself. And competition in finance has to be more than a zero sum game - it has sometimes looked like that, as trading desks compete against each other to be a fraction of a second faster and to knock the other out. Competition and innovation has to be aimed at serving the needs of society and the economy better, here in Singapore and abroad. So it is worth reminding ourselves of these larger purposes and opportunities. I will highlight five: First, financing the growth of infrastructure in emerging Asia, and increasingly of climate-resilient, low-carbon investments. Both banking and capital markets should seek to meet what is still a huge financing gap in the region for critical and sustainable infrastructure. Second, financing growth enterprises and SMEs. SMEs are the backbone of all our economies. Besides finding new ways to meet their financing needs, banks can also help to raise their productivity by helping them adopt digital services. Third, reducing costs and improving convenience for consumers. We are already seeing major changes here, especially in cheaper, more convenient and seamless payments. Fourth, in helping people to plan early and achieve financial security in their later years. Singapore has recently come up top in the world for life expectancy. It is to be celebrated, but it also increases the need for good financial advice, and for those with savings outside their CPF accounts to be able to invest in products that will help them achieve greater retirement security.