Singapore’s Virtual Banks Offer chance for Homegrown AI to Shine
As the battle between traditional and virtual banks takes off in earnest in 2019 and 2020, we are going to see a huge demand for more powerful AI technologies
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Minister Tharman Shanmugaratnam, chairman of the Monetary Authority of Singapore (MAS), is going to hail new virtual bank licences, expected to be granted later this year, as the next chapter in Singapore’s banking liberalisation journey. He also has good reason to be confident in the ability of local banks to compete with future digital upstarts.
AI is playing an increasingly important role in global banking operations across areas such as Know Your Customer (KYC), anti-fraud, and credit scoring. For example, face-to-face identity verification is being replaced with AI-powered facial recognition technology. Small and medium-sized (SME) businesses, which have historically been underserved, are among the biggest beneficiaries of AI as banks’ costs are brought down and new customer segments expand.
What this means is that the best banks of the coming decade will share a key trait in common: they will have the best AI. Aspiring virtual banks who want to make a real dent in the market will have to execute on these basic competencies as well – if not better – than their brick-and-mortar counterparts. For Singapore’s homegrown AI companies, it represents a hidden opportunity.
Singapore has been nothing if not vocal in its intentions to double up on efforts to build up its AI sector. For quite some time now, the technology has been earmarked as one of the most disruptive – and positive – forces of the future economy. While AI will inevitably displace some low-value jobs and tasks, it will also create new ones. Equipping the future workforce in financial services and other sectors with the tools to participate in an AI-powered economy remains a key government push.
With its commitment to free-market economics and progressive regulation, I see no reason why Singapore’s global dominance in banking can’t be set to continue as we enter the coming decade, so long as it prioritises AI innovation alongside good regulation and appreciation for the invisible hand of the market.
Minister Tharman Shanmugaratnam, chairman of the Monetary Authority of Singapore (MAS), is going to hail new virtual bank licences, expected to be granted later this year, as the next chapter in Singapore’s banking liberalisation journey. He also has good reason to be confident in the ability of local banks to compete with future digital upstarts.
AI is playing an increasingly important role in global banking operations across areas such as Know Your Customer (KYC), anti-fraud, and credit scoring. For example, face-to-face identity verification is being replaced with AI-powered facial recognition technology. Small and medium-sized (SME) businesses, which have historically been underserved, are among the biggest beneficiaries of AI as banks’ costs are brought down and new customer segments expand.
What this means is that the best banks of the coming decade will share a key trait in common: they will have the best AI. Aspiring virtual banks who want to make a real dent in the market will have to execute on these basic competencies as well – if not better – than their brick-and-mortar counterparts. For Singapore’s homegrown AI companies, it represents a hidden opportunity.
