strengthen your value proposition to the customer. as one fintech firm tells me, the battle is won by whoever can provide a more delightful customer experience. at the same time, we should not forget to ‘ mind the gap ’, or gaps. as insurers delve deeper into the realm of smart tools powered by complex algorithms, artificial intelligence and machine learning, there is also a need to identify and address potential pitfalls of such capabilities. for instance, one particular concern in deep learning models is that the “ learning ” by the machine is a black box, which could lead to biased “ data truths ”. this in turn may produce decisions or outcomes that are unexplainable, non - transparent or even unfair. also, while big data enables finer segregation of risk, the concept of insurance is always premised on risk pooling. a careful balance has to be struck between segmentation versus the sharing of risk among policyholders, for insurance to retain its long term societal relevance. we should guard against automatic or blanket financial exclusion or embedded selection bias. there is also a need to safeguard individuals ’ right to privacy in the use of personal data. therefore, an emerging area of focus for mas will concern the ethical use of data by financial institutions. we will look to provide more guidance on the issues of fairness, ethics, accountability and transparency amidst this technology revolution. insurers are custodians of very large data sets, including personal information. we expect all insurers to have cybersecurity practices and controls that are aligned with our technology risk guidance and requirements. it is equally important for firms to have in place good cyber hygiene standards, and ensure that such good practices not just feature prominently in your it systems and policies, but are also embedded in day - to - day work processes. more broadly, how will mas, as a regulator, partner the industry in this transformation journey? let me first set out a few principles that guide our approach : firstly, mas is technology - neutral and will not seek to favour one technology over another. secondly, we take on a more principles - based approach where the focus is on outcomes – 3 / 5 bis central bankers'speeches whether a new business model or adopted technology will threaten financial institutions ’ safety and soundness, or the fairness in their dealings with the public. thirdly, we believe that regulations should support and not stifle innovation. innovations by their inherent nature will move ahead of rules. what we want to guard

tension between disruption of existing players and collaboration with them. many fintech players see themselves as disrupters. but there ’ s also a fair bit of collaboration that ’ s taking place. established financial institutions have been partnering or acquiring new, smaller players with new technologies. acquiring them either as a defensive mechanism or as a way of bringing disruptive technologies within their own organisation with the hope of strengthening what they offer customers. it ’ s hard to say how this will play out in the years to come – hard to say whether the disrupters will indeed disrupt the existing financial business in a significant way. i think it ’ s too early to say. in china, we have some major fintech players, they are no longer new now, those like alibaba and tencent. they have become established names. elsewhere it hasn ’ t made too much of a difference yet. it is early days. it ’ s entirely possible that some new fintech players will eventually make their mark as enduring brands in finance. but we are also likely to see the growing collaboration i have talked about, between established players and start - ups. it is not a zero sum game. and fintech ventures are also acting as a catalyst for existing players to reengineer legacy systems. but most importantly, fintech is promoting a shift from the traditional focus on products to a focus on customers. it ’ s about understanding their needs, and finding a way of delivering cheaper, or more convenient and more tailored services to the customer. the second tension is also important, and which we must be willing to manage. it ’ s the tension between allowing for experimentation in finance and preserving trust and credibility in our financial system. they are both important and we must be willing to manage the tension. there was i think, in the first wave of fintech, a certain breathlessness in the way which new businesses were coming up, and in the way which they were perceived and talked about. such as, in the ( peer - to - peer ) p2p lending platforms, where the name of the game was often to lend as quickly as you can, leveraging on investments in these fintech companies. the scene is now maturing. some of these new lending platforms in the us and elsewhere are now more concerned with the quality of loans they make. like banks, whose business is credit underwriting, they have to be good at both data analytics and judgment. bis central bankers ’ speeches most fintech ventures, globally