The Monetary Authority of Singapore (MAS) signed a memorandum of cooperation with International Finance Corporation (IFC), a member of the World Bank Group to work together for establishing and developing 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 explore options to create an industry “sandbox”, which will serve as a cloud-based testing environment through which banks and FinTech players can develop, test and refine digital finance and inclusion solutions. The sandbox will enable distribution of FinTech solutions to financial institutions located in multiple jurisdictions. It is also hoped that the platform would spur discussions amongst participating regulators on cross-border policy harmonisation across ASEAN.
One of the key objective of AFIN is to improve access to finance for underserved segments of the population, leveraging developments in technology which make it feasible to reach these segments of the population at a fraction of the cost and at a much faster speed.
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.
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.
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.”
"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,” said Vivek Pathak, IFC’s Director for East Asia & the Pacific.
IFC has a long history of supporting the technology, telecommunications, and financial services sectors. The rapidly growing area of FinTech sits at the intersection of these industries and has great potential to help countries overcome development challenges. IFC has delivered 75 advisory projects in digital financial services worldwide, and has invested $400 million in close to 30 FinTech firms and digital financial services providers.
MAS has announced a slew of initiatives in recent months to support and promote the growth of FinTech, including establishment of a regulatory sandbox, entering into or facilitating international partnerships (here and here) and establishment of a data analytics group.
Read the press release here.