Senior Singaporean regulator says the success of fintech distruptors lies in partnerships with banks

Singapore is widely acknowledged as being an epicenter of interbank and insitutional FX, as it is home to the largest institutional FX industry in Asia, and the third largest in the world.

Today, a senior financial markets regulator within the Monetary Authority of Singapore (MAS) has stated that fintech firms are not a threat to banks but “enablers” whose success will lie in partnering with banks, and enabling them to succeed will prosper.

The fact that the MAS actually has a dedicated senior regulatory official that concentrates on fintech is testimony to the advanced standing that exists there.

Mr Sopnendu Mohanty, who holds the position of Chief Fintech Officer at the Monetary Authority of Singapore yesterday stated “The initial euphoria that fintech firms will eat their lunch and eat their dinner has gone away.”

He continued “They are working very hard with the banks to co-create, co-participate – which is the right thing.”

The distruptive nature of the modus operandi of many fintech firms may well either influence the direction which once-traditional banks have taken, or completely change the face of the existing financial markets landscape, especially if traditional banks are slow to innovate.

Mr. Mohanty, who is not just a belt-and-braces government official, but spent a significant amount of time at Citigroup, therefore understands the industry from a commercial perspective and not just a regulatory one, understands that collaboration is the way forward for the financial sector in Singapore.

“MAS’ approach to fintech is to use the power of technology to help banks to succeed. It’s not a game of disruptors versus enablers. We see fintech as an enabler. The good news is fintech companies by design are creating far superior technology products, and where success lies is in partnering with banks, and enabling banks to succeed” – Mr Sopnendu Mohanty, Chief Fintech Officer, MAS.

Mr Mohanty also promised that this year would be an exciting one for fintech in Singapore, with the kickoff on Tuesday of a two-day conference on Application Programming Interfaces (API), organised by MAS for 100 invited industry players at the Ritz-Carlton.

“The only way (to help banks innovate faster) is through what I call the democratisation of banking services through API, that allows third party developers to work with the banks to bring out that unique product,” said Mr Mohanty.

“As a regulator, we want to see that happening in Singapore, we want to see the industries picking up that service-oriented architecture quickly,” he added.

Mr. Mohanty considers that there are two types of companies in the fintech sector, the first group which has risen to prominence being that which offers financial services like crowdfunding or peer-to-peer lending, while the second provides technology to financial services firms.

Most fintech firms here belong to the second category, said Mr Mohanty. “A lot of fintech companies want to participate with banks – the trend is clear now,” he said.

Mr Mohanty also promised that this year would be an exciting one for fintech in Singapore, spearheaded by a two-day conference on Tuesday next week which focuses on Application Programming Interfaces (API), organised by MAS for 100 invited industry executives at the Ritz-Carlton.

With a very clear understanding of how API technology fits into the financial ecosystem, Mr. Mohanty stated “The only way (to help banks innovate faster) is through what I call the democratisation of banking services through API, that allows third party developers to work with the banks to bring out that unique product. As a regulator, we want to see that happening in Singapore, we want to see the industries picking up that service-oriented architecture quickly.”