In such a case, a review of that regulatory policy may be necessary. There is no one-size-fits-all supervisory answer. It simply means that as regulators, we need to keep abreast with technological developments. Only then, can we exercise thoughtful judgment. The fact that many financial regulators including the MAS have allowed regulatory sandboxes to be set up highlights a preparedness to allow innovative financial models to first be tested within defined parameters. Harnessing technology to strengthen supervision 21 There is a growing area of technology use that will be directly relevant to financial supervision – Regulatory Technology (or RegTech). This is the use of advanced technology systems and algorithms to enhance risk management and regulatory compliance. 22 Many financial institutions have embraced RegTech, such as: Predictive analytics being used in stress testing; Artificial Intelligence and Machine Learning-powered systems to identify money laundering risks; and Cognitive computing and behavioural algorithms to detect suspicious trading and possible misconduct. 23 On the supervisor’s end, the MAS is developing our own ‘SupTech’ to improve and sharpen our surveillance and analytical capabilities. Since about a year ago, we have set up a dedicated unit for SupTech within our Data Analytics Group. 24 The aim is to make greater use of technology and “smart tools” to guide our financial surveillance and supervision functions. To do so, building the infrastructure for our data analytics projects is important. We are putting in place an MAS Private Cloud. This will serve as the foundation to provide computing power to all data analytics projects in MAS.

MAS also implemented a 24/7 Sectoral Security Operations Centre (SOC) to obtain information from intelligence sources on cyber threat targeting our financial sector. We have partnered the Association of Banks in Singapore (ABS) to update MAS’ Technology Risk Management Guidelines. Also in partnership with the ABS, we are in the process of establishing guidelines for “redteaming” to enhance cyber security testing. 27 I know that this theme of technology will feature prominently over these two days. Such mutual sharing and learning will be an important aspect of regulatory up-levelling. Integrity and Conduct 28 Last but not least, let me wrap up my remarks by highlighting the importance of strong integrity and proper conduct in the financial industry. No amount of regulatory reforms or supervision can assure a stable financial system if the culture and conduct of firms and individuals are flawed. Around the business complexities of different firms, the core should be the same – a business culture centred on doing right and doing good. 29 MAS will be stepping up our supervisory reviews on various aspects of risk governance and culture in financial institutions. Recently, we conducted a culture and conduct survey among a number of the key institutions. Based on the survey responses, we are carrying out dialogues to ascertain commonalities and differences in industry practices. We are sharing our supervisory experiences with other regulators to learn from one another. From these, we hope to provide the broader industry with our observations on best practices and areas for improvement.