Singapore’s central bank, MAS, has announced a series of specific measures to build technology infrastructure to drive innovation. The goal is to position the financial services industry, including the insurance companies, for the future economy.
In the insurance arena specifically, MAS said that it will build data infrastructure for natural catastrophes and cyber risk insurance. The Natural Catastrophe Data Analytics Exchange seeks to expand the availability of high-quality data on catastrophes in Asia by pooling industry loss data and collecting economic data through remote sensing technologies. This enhanced data will help increase catastrophe insurance penetration in the region, MAS said in a statement released last month.
The Cyber Risk Management Project aims to develop industry-wide cyber risk definitions, databases and models to better quantify cyber risks. This will help to accelerate the growth of cyber risk insurance in Singapore and across Asia.
Finance sector-wide KYC utility
Other measures include exploring the feasibility of developing an industry Know-Your-Customer (KYC) utility. This is a critical process for the financial services industry worldwide, but has become increasingly costly and resource intensive, said MAS. It can also be duplicative and inefficient – clients are required to repeat the same KYC processes and provide the same information to every financial institution when opening a bank account, applying for a credit card or insurance policy, said MAS.
The central bank is working closely with the industry and other government agencies to study the feasibility of developing an industry KYC utility. Such a utility can perform KYC processes on a centralised basis, and enable participating financial institutions to leverage government registered information based on client consent. It will also help to simplify and automate KYC processes, reduce compliance burden and enhance efficiencies within financial institutions.
In addition, the measures will put in place infrastructure for the pervasive use of electronic payments that will also help the insurance sector. MAS has been working with the financial industry to promote the broad use of electronic payments to enhance consumer convenience and business productivity.
“The underlying thrust of MAS’ various initiatives is to provide a conducive environment for innovation – which is critical for the future of financial services. We do this through a judicious regulatory framework and enabling technology infrastructure. And even as we allow more risk-taking, we want to do so without compromising the safety of financial institutions and the stability of the financial system,” said Mr Ravi Menon, Managing Director, MAS.
MAS Data Analytics Group
Meanwhile, MAS also announced the formation of a new Data Analytics Group (DAG) with effect from 15 March 2017. The move is part of MAS’ broader efforts to help position itself and the financial sector for the digital economy of the future. DAG will lead MAS’s efforts to harness the power of data analytics to unlock insights, enhance the supervision of financial institutions, make regulatory compliance more efficient for financial institutions, and improve work efficiency across the organisation.
Mr Menon said: “Our new Data Analytics Group will work with the financial industry to sharpen the surveillance of risks, and with the various departments within MAS to transform the way we do our work.”