IFC, a member of the World Bank Group, and the Monetary Authority of Singapore (MAS) signed a memorandum of cooperation yesterday, agreeing to work together to establish and develop the ASEAN Financial Innovation Network (AFIN).
The network aims to facilitate broader adoption of financial technology (FinTech) innovation and development, and enhance economic integration within the ASEAN region.
Through AFIN, IFC and MAS plan to establish a regional network to help financial institutions, FinTech firms and regulators address issues of connectivity, local compliance and cross border compatibility. AFIN will also evaluate options to create an industry “sandbox” to provide a cloud-based testing environment through which banks and FinTech players can develop, test and refine digital finance and inclusion solutions, the MAS said in a statement.
Further to the 2016 Singapore FinTech Festival, this initiative has emerged from discussions between IFC, MAS and the ASEAN Bankers Association (ABA), and through their engagement with the broader financial and FinTech ecosystem in the region. This memorandum between MAS and IFC is the first step in an initiative which will also foresee ABA playing an important role in helping to expand access to financial services across the region.
The signing took place during “Banking at a Crossroads”, IFC’s Digital Finance Partners Meeting 2017 in Singapore, bringing together over 150 senior-level executives from leading financial institutions, technology companies and FinTech firms from around the globe. The meeting was hosted by IFC’s Financial Institutions Group and provided a platform for Singaporean, global and regional leaders to deliberate on innovations, challenges, opportunities and solutions in the digital finance industry.
Mr Sopnendu Mohanty, Chief FinTech Officer, MAS, said: “We believe that innovation and digital technology can play a decisive role in enhancing financial access for a wider population. MAS is pleased to partner with IFC and further its discussions with ABA to help establish an industry sandbox infrastructure that promotes real-time collaboration and financial innovation. This industry sandbox will be a cloud-based marketplace for distribution of FinTech solutions to financial institutions located in multiple jurisdictions. We hope that this platform could also spur discussions amongst participating regulators on cross-border policy harmonisation across ASEAN.”
Mr Vivek Pathak, IFC’s Director for East Asia & the Pacific, said: “The initiative builds on IFC’s efforts to deepen access to finance for underserved segments of the population.
“In today’s world it is feasible to reach these segments of the population at a fraction of the cost and at a speed that was not feasible earlier. New business models resulting from digital transformation of financial services and FinTech adoption in the region can create new markets that will lead to a higher level of prosperity. The end desired state is for financial institutions to be able to embrace innovation and collaboration more easily, and for innovations to spread more easily across the region. AFIN will enable banks, microfinance institutions, and other financial services providers to innovate across channels, products, and processes. Such innovation can unlock opportunities to better serve their clients, address unmet needs in their markets, and achieve sustainability through lower costs and more efficient service delivery.”
IFC has a long history of supporting the technology, telecommunications, and financial services sectors. FinTech is at the core of the growing interaction between those industries, with great potential to help countries overcome development challenges, by making widespread access to financial services possible. IFC has delivered 75 advisory projects in digital financial services worldwide, and has invested US$400 million in close to 30 FinTech firms and digital financial services providers.