and impacts that we must acknowledge and understand. when policymakers flatten and standardize regulations and supervisory expectations, we create strong incentives for banks to achieve greater economies of scale through merger and make it harder for new banks to successfully compete with existing banks. when we “ raise the bar ” for banks to engage in certain activities in a way that is disproportionate to the risk of those activities, we create incentives for those activities to migrate to non - banks outside of the regulatory perimeter. we must understand whether the policy decisions embedded in the regulatory and supervisory framework are effective and complementary. if they are not, we must acknowledge the consequences of knowingly implementing conflicting policy choices. de novo bank formation i continue to be concerned about the decline in the number of banks in the u. s. as i have noted in the past, there are several indications that there is an unmet demand for new bank creation indicated by the ongoing preference for “ charter strip ” acquisitions, the ongoing shift of activities out of the banking system, and the rising demand for banking - as - a - service partnerships. 5 see michelle w. bowman, “ the consequences of fewer banks in the u. s. banking system, ” ( speech at the wharton financial regulation conference, philadelphia, pa, april 14, 2023 ), https : / / www. federalreserve. gov / newsevents / speech / files / bowman20230414a. pdf. - 5for the past decade, de novo bank formation has been largely stagnant, even as the banking industry has rapidly evolved over the same time period. many factors influence the pursuit of de novo bank charters, including the interest rate environment, business opportunities, the intense competition for qualified bank management and staff, and potentially less onerous alternatives for financial services providers to operate outside of the regulated banking system. the decision to form a de novo bank is also informed by normal business considerations including identifying investors, establishing a viable business plan, and ensuring the ability to navigate the “ start - up ” phase of a new bank and manage upfront operational costs, all while being subjected to intense supervisory oversight over the first several years of de novo bank operation. yet, perhaps the most important factor that influences de novo bank formation is the regulatory and supervisory framework, which includes the application process and receipt of regulatory approval. the application process can be a significant obstacle to de novo bank formation. applications often experience significant delays between the initial charter application filing with

the feat principles. building on these foundations, mas worked with an industry consortium through project mindforge to identify the risks and opportunities of genai, and published a white paper in may. mas is also putting together a set of good practices for addressing ai model, technology and cyber risks, and considering supervisory guidance next year. an industry - led ai governance handbook to aid the development of good ai governance practices is also targeted to be finalised then. technology centres of excellence third, we will anchor the ai centres of excellence of financial institutions in singapore. there are more than 40 fintech innovation labs of fis and technology firms in singapore. we will build on our experience in anchoring innovation centres here, and support fis in building ai centres of excellence here as well. the activities could include ai model building and training, deployment of ai models to use cases, and governance, risk management, testing and monitoring. we will make available funding support for these activities and capabilities to be built in singapore. we believe there are strong prospects for the financial industry to work together to apply ai to solve problems beyond what each fi can do individually. we have initiated a new programme called " ai collider " to bring the industry together to experiment on and scale industry - wide ai solutions. this involves the development of policies and protocols and a platform for secure and privacy - protecting data exchange where fis can contribute their respective data and ai models. industry - wide use cases can be built, trained and deployed on this platform. in the first pilot project, we have identified scam and fraud detection as a use case. by pooling data across banks, suspicious movement of money across bank accounts of multiple banks can be detected, and prompt action taken to investigate and stop these scams. we will share more details in due course. quantum technology quantum computing is another transformative technology. according to mckinsey, quantum computing use cases in financial services could create over us $ 600 billion in value by 2035. 10 / 12 bis - central bankers'speeches there are potential use cases in areas like risk management, trading, portfolio optimisation, and cybersecurity. we have engaged financial institutions and received early expressions of interest to work with singapore. mas has been collaborating with the national quantum office following the announcement of the national quantum strategy by deputy prime minister and mas board member mr heng swee keat in may. mas will support financial institutions to build capabilities in quantum computing and security in singapore. this will contribute