Ong Chong Tee: The future of banking - evolution, revolution or a big bang Introductory remarks by Mr Ong Chong Tee, Deputy Managing Director (Financial Supervision) of the Monetary Authority of Singapore, at the German-Singaporean Financial Forum, Singapore, 16 April 2018. * * * Dr Johannes Beermann, Member of the Executive Board of the Deutsche Bundesbank His Excellency Dr Ulrich Sante, Ambassador of the Federal Republic of Germany Dr Claus Trenner, President of the Singaporean-German Chamber of Industry and Commerce Distinguished Guests, Ladies and Gentlemen It is my pleasure to join you this morning at the inaugural German-Singaporean Financial Forum. Bilateral relations Singapore and Germany have strong bilateral relations at many levels. (a) Last year, Chancellor Angela Merkel and Prime Minister Lee Hsien Loong met in Berlin in July, and later, President Halimah Yacob hosted President Frank-Walter Steinmeier during his state visit in November. (b) Singapore was also invited to the G20 meetings in 2017 during Germany’s Presidency. The close partnerships at both government and business levels underscore the many common values and strategic interests that we share. For example, in the area of financial services, there is strong emphasis on financial institutions having high standards of conduct and prudence given the importance of savings and investment in our societies. MAS and our German counterparts, the Bundesbank and BaFin1, participate in many international forums and standard-setting bodies including the Financial Stability Board, the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, and the International Organisation of Securities Commission.

In other words, with the rise of new FinTech players, activities that are considered banking services need not be provided by traditional banks alone. Technology or e-commerce giants like Alibaba and Tencent have moved into the financial services space, as they seek to strengthen their customer-centric propositions and services. Business disruptions need not be led only by the large firms. Smaller nimble start-ups have also sought to un-bundle the banking value chain by focusing on niche areas such as financial advisory services and consumer finance. There are two underlying factors: (a) One, is the arrival of the smartphones that launched a new era of mobile apps. Banking has moved from physical branches, to the desks, and now to the palm. Recently, I read a report that British psychologists found that young adults use their smartphones roughly one-third of their total waking hours. Simply put, all of us can now do banking anytime, anywhere. And many segments of our populations are increasingly comfortable going digital, be it for banking, or to purchase goods and services. (b) Second, the accessibility afforded by technology has led banks to shift away from a production-consumption model. Traditional banking models are based on making available the range of the services that a customer need. Today, competition centres on the customer experience. One of our local Singapore banks has a tag line on making banking joyful. The notion of delighting a customer opens up a whole field of competitive ideas as to how to generate that positive experience.