Singapore’s central bank and financial regulator, Monetary Authority of Singapore (MAS), has a fintech lab that aims to attract fintech companies through the “sandbox.” The “sandbox” allows fintech innovators to conduct small-scale experiments and test them in a low-risk environment before pushing it out on a larger scale.
A big reason why Singapore has created the “sandbox” is because of reports that state a huge loss in jobs due to fintech. According to a 2016 Citigroup report, European and American banks could lose about 2 million jobs in the next ten years due to fintech’s ability to allow customers to do more online. Naturally, Singapore fears this could happen to them as 12.6% of its GDP is reliant on finance.
Singapore aims for a flourishing fintech industry that supports rather than interferes with big banks. In three years, the MAS plans to invest $158 million dollars in the fintech sector. The goal is to combine the strength of both fintech and banks. Fintech firms are more nimble and cost-effective, while banks have built an image of credibility and stability, as well as being better equipped with resources.
I can see the benefits of working in a partnership between banks and fintech innovators to expand the market. It will be interesting to see whether banks and fintech merge or collide in the near future.
Reference: http://www.economist.com/news/finance-and-economics/21714384-city-state-wants-fintech-bolsters-not-disrupts-mainstream