ravi menon : asia's digital transformation remarks by mr ravi menon, managing director of the monetary authority of singapore, at the gic institutional investors roundtable, singapore, 31 october 2018. * * * ladies and gentlemen, good morning. i thank gic for the invitation and am pleased to meet all of you. why fintech? about three - and - a - half years ago, the monetary authority of singapore ( mas ) made a momentous decision - to promote an innovative and dynamic financial sector by working with the industry to harness the power of technology. we saw that technology was transforming the way people live their lives, the way companies deliver products and services, and the way cities work and connect. meanwhile, the financial industry globally was facing the headwinds of slower economic growth, tighter regulation, and keen competition from non - financial technology players. technology presented an opportunity to inject new dynamism and new growth in financial services. it was an opportunity to increase efficiency in an industry that had some of the most archaic practices around – just think of interbank payments and settlements. it was an opportunity to manage risks better : financial institutions were pouring ever more resources into compliance and risk management – and still getting into trouble. most of all, it was an opportunity to improve people ’ s lives to bring financial services to the unbanked and uninsured in asia ; to help a growing middle class plan its finances more holistically and efficiently ; to help enterprises raise money, make payments, and tap new markets. 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

than their actual performance ( i. e. they are overconfident ). the cookie jar experiment18 asks people to estimate how many coins there are in a transparent cookie jar. when people do this independently, the accuracy of the average judgement rises with the number of estimates and is generally very close to the actual number of coins. but if people hear or see each other ’ s estimates, the mean can shift wildly up or down. this experiment has been completed across many different groups by age, sex, culture and so on, all giving the same result. the experiment highlights an important point ; better results are achieved through diversity and independent opinion. 4 / 7 bis central bankers'speeches as i have commented on in the past, we have reviewed a sample of diversity policies in regulated firms, which many financial services firms are now required to have ( under the crd, solvency ii and the central bank ’ s corporate governance codes ). in the main, they are striking for their lack of ambition. they should not just be about ticking the box from a compliance perspective – again, that question of ‘ is it legal ’ arises. much more is needed to be done, and our supervisory efforts in this regard are going to increase. regulatory response the central bank continues to enhance its approach to behaviour and culture, including learning from international best practice. work has been undertaken in banks and insurance firms from a prudential perspective, and in the consumer area we have developed a framework for the assessment of culture in regulated entities. as has been well documented, this work will be expedited across the retail banks over the coming months, and be rolled out further after that. a variety of tools will be used to assess culture in regulated firms, including how boards and senior management are delivering against the good practices outlined earlier. these include considering : key risk indicators and triggers, for example ; staff turnover, and risk appetite breaches ; approach to staff incentivisation ; staff training ; onsite inspections ; staff surveys ; board and executive management meetings observation ; interviews across the organisation ; and product design, development and monitoring ( including how customers are incentivised ). this is not with the aim of delivering the impossible and frankly undesirable outcome of a standardised culture across all financial services firms, but of assessing the extent to which regulated firms are delivering the cultures they espouse and identifying improvements that reduce prudential and conduct risks. we expect institutions to critically evaluate their culture