MAS will now allow insurers to offer the full suite of life insurance products online without advice, announced Mr Ravi Menon, Managing Director of Singapore’s central bank at the opening of the FinTech Conference held as part of last month’s inaugural Singapore FinTech Festival.
Mr Menon said: “MAS will be issuing guidance on the safeguards to be put in place for online distribution of life insurance products.” MAS already allows insurers to offer online without advice simple term life and direct purchase policies with broadly standardised features.
Guidance on robo advice
Mr Menon noted that automated, algorithm-based digital advice on financial or investment services by robo advisers has taken off in the US and will soon reach Singapore’s shores. He said: “MAS will soon set out proposals on the governance, supervision, and management of algorithms for robo advisers to ensure integrity and robustness in the delivery of financial advice. MAS will consult the industry before finalising the guidance.”
He pointed out that MAS’s regulatory framework for financial advice is technology-agnostic but it needs to be updated as the digital offering of financial advice and insurance is becoming more popular, catering to the needs of a growing segment of technology-savvy, self-directed consumers.
He said that this would make it easier for consumers to benefit from the lower cost and greater choice that digital advice and insurance can potentially provide, while at the same time ensuring adequate safeguards for these consumers.
Mr Menon yesterday also announced:
The Financial Services – Information Sharing and Analysis Centre (FS-ISAC) will set up in Singapore its only cyber intelligence centre in the Asia-Pacific region. “This centre will help our financial industry better monitor cyber threats and provide better intelligence support. It will also help deepen the capabilities of the cyber security community here,” he said.
The FS-ISAC is designed, developed and owned by the financial services industry including banks, card companies, payment and clearing processors, brokerage firms, insurance companies and credit unions. It is a non-profit, private-sector initiative. It was established to facilitate the sharing of information between the public and private sectors on the physical and cyber security threats.
MAS will streamline the licensing of payments services under a single, activity-based modular framework. This means: holding just one licence to conduct different kinds of payment activities; meeting only those regulations pertinent to the specific payments activities they undertake, rather than the full gamut of payments regulations; adhering to common standards for consumer protection and cyber security.
MAS will test the use of its own digital currency, in a trial of a blockchain-driven system for interbank payments. MAS, the Singapore Exchange, and eight banks have embarked on a proof-of-concept project to use blockchain technology for inter-bank payments, including cross-border transactions in foreign currency.
Under the pilot system, banks will deposit cash as collateral with the MAS in exchange for MAS-issued digital currency. The banks can later redeem the digital currency for cash. Participating banks can pay each other directly with this digital currency.
MAS has published the “Finance-as-a-Service API Playbook” which provides guidance on common and useful APIs (Application Programming Interfaces) that financial institutions could make available.
MAS aims to establish Singapore as a centre of excellence for APIs on financial services.
MAS has published its “regulatory sandbox” guidelines to encourage and enable experimentation of solutions that utilise technology innovatively to deliver financial products or services. The guidelines will improve the clarity, flexibility and transparency of the regulatory sandbox.
Mr Menon concluded: “We talk a lot about technology but it is really about fostering a culture of innovation. In an industry facing the headwinds of lower economic growth and heavier regulatory burdens, innovation must be the way to refresh and re-energise the business model. And innovation is not always about high-tech. It is about seeking newer and better ways to do things, about a spirit of enterprise. It is about hope in the future. The financial industry needs that.”
Several insurance companies spotlighted their innovation platforms at the FinTech Festival and invited start-ups to pitch fresh ideas that will reinvent the way insurance is delivered and experienced.
Among them, Allianz announced the launch of its Digital Arena innovation platform, which will support the global insurer in identifying new ways to meet customer needs along the insurance value chain. LumenLab, MetLife’s Singapore-based innovation centre, announced the launch of Collab – a three-month programme that supports “product ready” start-ups as they tackle the business needs of tomorrow. NTUC Income announced that nine start-ups, offering potential solutions in preventive healthcare, enhanced customer experience and digital advisory services, are to join its inaugural InsurTech accelerator programme, partnering with Infocomm Investments.
The week-long Festival was organised by MAS, in partnership with The Association of Banks in Singapore (ABS), and aimed to connect the global FinTech community. Close to 11,000 participants from more than 50 countries registered for the various events, comprising conferences on FinTech, Tech Risk, and RegTech; the Global FinTech Hackcelerator; the FinTech Awards; visits to innovation labs; as well as community and networking events.