Speaking at the Singapore FinTech Festival, Minister for
Education (Higher Education and Skills) and Second Minister for Defence, Mr.
Ong Ye Kung, provided
updates on Singapore’s FinTech Regulatory Sandbox.
The FinTech regulatory sandbox was launched by the Monetary
Authority of Singapore (MAS) in June 2016 to allow financial institutions and
FinTech start-ups to test their innovations, while maintaining safety. Since
then, MAS has received more than 30 sandbox applications.
Mr. Ong revealed that half the applications did not require
the sandbox and they were given the go-ahead by MAS to launch their solutions.
“That is really encouraging and a positive reflection of our
regulatory framework, because innovation thrives most when enterprising people
can commence business and implement ideas easily,” Mr. Ong said.
The remaining applicants are currently in the sandbox, have
been approved to enter the sandbox, or are in discussions with MAS on their
Mr. Ong provided an example of the kind of technologies
being tested in the sandbox. Kristal Advisors is currently testing its
innovative financial advisory and portfolio management service in the sandbox. Rather
than the usual way of recommending investment portfolios based on a set of
pre-defined rules, the solution uses machine learning to continuously analyse
and learn from the investor’s on-going decisions, with the aim of making better
recommendations to the investor.
Due to the untested technology and the unconventional nature
of the fund manager, MAS set up boundaries within which Kristal could test its
technology in a live environment with real customers.
One applicant graduated from the sandbox in August 2017. The
first applicant to graduate from the regulatory sandbox is an insurance broker
PolicyPal aims to help customers manage their insurance
policies digitally in one place through a mobile app. The customer uses his
phone to take photographs of his insurance policies and uploads them onto
PolicyPal’s mobile app. The app uses OCR (Optical Character Recognition) technology
to digitise and analyse the documents, and assesses whether the customer has
duplicate or insufficient insurance coverage. The customer can purchase new
insurance plans using the app and store them in the same app, easily.
As a startup, PolicyPal was unable to meet MAS’ criteria for
licensing, including track record and financial requirements. In addition, the
OCR and applied analytics technologies were untested. PolicyPal was therefore
granted the necessary exemptions to allow it to test its solution in the
sandbox with a limited pool of actual and real customers. PolicyPal was
successful in its sandbox experiment and is now a licensed insurance
Mr. Ong explained that the sandbox is as much a learning
journey for the applicants, as it is for MAS.
“As we learn more, we can do more for the industry, and do
it better. MAS will expedite the sandbox application assessment so that firms
can test and launch their innovative solutions faster. MAS will also further
loosen the regulatory boundaries for sandbox cases where the risks do not
outweigh the potential benefits of the solution to consumers,” he said.