In short: to maintain its position as one of the top financial centres in the world, Singapore must embrace FinTech – harnessing its benefits, managing its risks. Thus began Singapore’s FinTech journey. And by FinTech, I mean two things: encourage and support financial institutions to experiment and harness technology; and promote non-financial FinTech players to provide competition and inject innovation so that the ecosystem as a whole benefits. MAS takes an even-handed approach, allowing competition between financial institutions and non-financial FinTech players as well as facilitating collaboration among them. And of course, doing all this with a keen eye on managing the risks associated with technology – safeguarding financial stability and maintaining public confidence. MAS and the financial industry are not doing this in a vacuum, but within the larger context of Singapore’s Smart Nation agenda – to build a digital economy and society for higher productivity and more gracious living. Asia’s Digital Transformation  1/4  BIS central bankers' speeches  Singapore’s Smart Nation drive is itself playing out against the backdrop of a dynamic Asia on the cusp of a digital revolution. Asia remains the fastest growing region in the world, with the ASEAN-4 economies 1 expected to grow at 4.7% p.a. over the next 10 years, China at 5.7%, and India at 6.5%. Growing affluence, rapid urbanisation, and expanding education, are propelling strong demand for modern services like travel, shopping, and financial services. Yet large segments of Asia’s population have no access to banking and payments services, insurance cover, or investment opportunities.

According to the World Bank, 170 million people in the ten member states of ASEAN with mobile phones remain unbanked. Some 53 million people still receive agriculture payments in cash. Financial technology or FinTech is making significant headway in bringing these under-served markets into the formal financial economy. Example: Digital financial transactions have increased by 30% in Thailand from 2014 to 2017. The FinTech revolution in Southeast Asia is being driven by three forces. First, there is a thriving FinTech start-up scene in ASEAN. These start-ups are building large digital businesses and changing the face of financial services while doing so. Take for example Wing in Cambodia, Wave Money in Myanmar, Momo in Vietnam, and MatchMove in Singapore. They have quickly scaled by providing unbanked individuals with the means to store value and transact digitally. And by extending their services to SMEs, these FinTech firms are facilitating the digitalisation of entire supply chains. Second, the advent of pervasive e-commerce platforms has provided an Asian model for financial inclusion. These platforms rapidly develop a consumer base and offer a broad stack of services, expanding into areas such as payments and credit. E-commerce platforms are among the best-funded ASEAN businesses. Grab, Go-Jek, Carousell, and Lazada have together raised nearly $ billion in 2018. According to a study by Google and Temasek, e-commerce is projected to grow explosively in ASEAN, from $ billion in 2015 to $ billion in 2025.