What we will diligently protect is the trust and credibility in our financial system. We will also be paying closer attention to financial institutions’ management of cyber-threats and to new forms of financial stability vulnerabilities as digitisation blurs the boundaries across geography and industries. Recently, we have created an enhanced role of a Chief Cybersecurity Officer as well as appointed a new Chief Data Officer. I believe there is much we can share and learn from other central banks, financial regulators and even law enforcement agencies, such as our European counterparts. Looking ahead Finally, there are other areas that should matter to all of us amidst the ongoing transformations in the banking industry. One is the important issue of financial inclusion. In the quest to innovate and as banks develop the sophistication to sharpen the profile of each customer, we should not overlook the need for financial inclusion – especially access to basic banking and financial services for under-served communities. Another area is in the responsible use of technology tools. Earlier this month, MAS announced the setting up of a regulator-industry grouping to co-create a guide to promote the responsible and ethical use of AI and data analytics by financial institutions. This Committee is known by its acronym FEAT – which stands for Fairness, Ethics, Accountability and Transparency. This gives you a good idea of its mandate. The key is as technology and data analytics usage become more prevalent, the responsible use of these is equally paramount.

Only then are we able to exercise thoughtful judgment. There will be a balance between supporting innovation and technology use, while pre-empting new or heightened risks that these may present. MAS takes an even-handed approach by providing a regulatory regime that is risk-proportionate across the range of institutions involved in regulated financial activities. We seek to provide the environment, and even to encourage new FinTech and other players to establish themselves to compete, collaborate and innovate. We allow for adoption of technology and innovation in 3/5  BIS central bankers' speeches  financial services, especially those that hold promise in raising efficiency, in creating new opportunities, in enabling new or value-adding services or simply to manage risks better. MAS adopts a “materiality and proportionality” test, and seeks to right-size regulations to be fitfor-purpose; for both traditional as well as new business models, according to the risks the activity poses. For example, in the new Payment Services Bill that MAS has consulted on, regulatory requirements for payment activities will be differentiated according to the risks that specific activities pose rather than apply a uniform set of regulations on all payment service providers. Regulation comes in when the risk posed becomes material or crosses a threshold. The weight of regulation must be proportionate to that risk. Singapore is one of the first jurisdictions to have established regulatory sandboxes where firms can experiment their innovative solutions in a contained environment, with access to a limited pool of actual customers.