SINGAPORE, July 1 — An intergovernmental banking organisation decided yesterday to build a new innovation hub centre in Singapore, a move that the Monetary Authority of Singapore (MAS) said reflects the country’s position as a “leading international fintech centre”.
The new centre in Singapore by the Bank of International Settlements (BIS) will join two others in Hong Kong and Switzerland to foster greater collaboration among central banks as the booming fintech sector continues to impact the global financial system.
It is rare for the BIS, which is based in Basel, Switzerland, to establish new physical offices.
The last time it did so was in 2002, when the BIS set up a representative office for the Americas in Mexico City. Another representative office for Asia Pacific has been in Hong Kong since 1998.
Founded in 1930, the BIS is owned by 60 central banks around the world representing more than 95 per cent of the world’s economy, and serves only central banks and other financial authorities.
When completed, BIS’ new innovation hub centres will work “to identify and develop in-depth insights into critical trends in technology affecting central banking, develop public goods in the technology space geared towards improving the functioning of the global financial system, and serve as a focal point for a network of central bank experts on innovation”, the international bank said in a statement.
“There are significant economies of scale in such an endeavour, and the BIS is the ideal vehicle to realise them,” said Jens Weidmann, chairman of the BIS board of directors.
BIS did not give any construction timelines or location of the new centre in Singapore, but said that it is subject to the “necessary institutional arrangements” as part of the project’s initial phase.
The development comes shortly after Singapore announced that fintech players without a track record in banking may soon apply to become fully fledged banks. Nearly seven out of 10 Singaporeans have made use of fintech solutions this year, one of the highest in the Asia Pacific region, according to an Ernst & Young report.
Ravi Menon, MAS’ managing director, said the BIS initiative will encourage countries to work together and maximise the benefits of cross-border digital connectivity and commerce.
“To fully harness the benefits of these innovations while ensuring the resilience of the financial sector, central banks must also innovate – to modernise the technology infrastructure and regulatory arrangements that underpin digital finance and the digital economy,” said Menon.
Mark Carney, BIS economic consultative committee chair, said this new economy is driven by changes in technology, demographics and the environment, through innovations led by the private fintech firms.
“While the private sector is driving these innovations, their efforts will be more effective if the hard and soft infrastructure of the global financial system support this innovation, promote resilience and level the playing field on which to compete. Central banks have a major role to play,” said Carney.
The creation and the work of the three hub centres “will be carried out in close collaboration and with the support of the host central banks”, including the MAS, the BIS added. — TODAY