Forefront of Innovation: Examining the Six Game-Changing Trends Discussed at the Singapore FinTech Festival 2023

The Singapore FinTech Festival (SFF) is one of the world’s leading FinTech conferences, bringing regulators, banks, and FinTechs together for a global dialogue on finance, technology and policy. Euromonitor International identified the six main directions discussed: Embedded Finance, Cross-Border Transactions, Sustainability & Inclusion, Artificial Intelligence, Digital Money, and Digital Assets.

Six Key Trends Discussed at the Singapore FinTech Festival 2023

Embedded finance

As embedded finance expands, globally supported by advancement in API, cloud and high-speed telecom networks, the mobility industry has emerged as a new forefront. Mastercard demonstrated the in-car payment with applications of EV charging payment and e-commerce payments, backed by partnerships with Mercedes Benz and Hyundai. ZA Tech collaborates with Carro to power auto insurance, while teaming up with Grab to provide accident cover and micro-insurance (health) for freelancers. Octomate also collaborates with Singlife on embedded insurance for freelancers. Cover Genius promoted embedded insurance solutions, showcasing partnerships with travel partners such as Booking Holdings and its Agoda brand.

Cross-border transactions

Globally, cross-border transactions will reach USD40-44 trillion in 2028

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Driven by 1.4 billion of monthly active users in China (according to Euromonitor International), Tencent unveiled strategic partnerships with Visa, Wise, Thunes on C2C remittance, while ICBC showcased global pay targeting large corporates.

Following the G20 Roadmap for Enhancing Cross-border Payments, the Monetary Authority of Singapore (MAS) and Bank Indonesia rolled out the cross-border QR payment linkage, to benefit travellers and financially-underserved merchants. MAS and Bank Negara Malaysia also launched the cross-border fast payment linkage, to provide secure, fast and affordable remittances to consumers and SMEs. Furthermore, The National Bank of Cambodia and Ant Group signed an agreement on interoperable cross-border payments via KHQR and Alipay+.

Sustainability and inclusion

For sustainability, MAS discussed Project Savannah, a collaboration with the UN to develop digital ESG credentials for MSMEs globally, reducing the complexity and cost to report verified ESG information for financing. MayBank also promoted its MyImpact credit card launched in August 2023, tracking and offsetting carbon footprint for consumers.

For inclusion, access to smartphones, the internet and adoption of digital identities were emphasised as critical factors for financially-underserved customers (referencing India’s experience, especially in Unified Payments Interface (UPI), while financial education is important to them to understand the basics of finance, risks and ways of protection. Regulators also urged FinTechs and Financial Institutions to further develop and scale micro-investment and micro-insurance to reach the financially unserved, referring to Ant Group’ case in micro-investment of CNY1.

Artificial intelligence

Innovations in AI, especially Generative AI, were demonstrated at the festival in 2023. Based on its own insights and data, HSBC demonstrated its “AI Markets” tool (HSBC’s “ChatGPT” model) targeting institutional investors to enhance productivity. By inputting several words, this tool can generate relevant insights and analytics, by screening of proprietary trading data and latest market insights. Furthermore, ICBC unveiled an Augmented Reality (AR) solution leveraging AI, enabling customers to browse a virtual service menu guided by a virtual assistant. It was also urged to expand AI into local languages models. The urgency of regulations and company policies in AI applications is emphasised again, for risk management, especially data leakage.

Digital money and digital assets

The IMF President announced exciting statistics on Central Bank Digital Currency (CBDC) adoption worldwide, showing 60% of markets globally are exploring CBDCs

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11 markets have already rolled this out, while another 19 markets are close to launch. The IMF also introduced the CBDC virtual handbook to guide the remaining markets from exploration to implementation. Furthermore, MAS announced plans to expand Project Orchid’s CBDC experiments. For example, Ant Group and Grab piloted Purpose Bound Money (PBM), facilitating Alipay users’ payment to Grab’s merchants.

Besides digital money serving as the stable and safe medium of exchange as well as the digital infrastructure to record transactions, digital assets (tokenised FX, bonds, funds) are considered another critical component to enable a network of interoperable systems for seamless transactions.

Asset tokenisation enables direct exchange and fractionalisation, while managing risks and stability. Via Project Guardian, together with partners, MAS has been trialling a foreign exchange tokenisation to achieve a 24/7 global liquidity pool, in which BNY Mellon and OCBC were reported to be experimenting with a cross-border FX solution across heterogenous networks.

Closer global collaboration required

Despite exciting partnerships and innovations unveiled in embedded finance and cross-border payments, among others, there has been increasing urgency to enhance privacy computing, which balances the needs of protecting customers’ privacy and encrypted information exchange among business partners. International teamwork in breakthroughs in privacy computing will greatly increase security and lower the cost of transactions to scale.

Via Project Guardian, MAS has established an alliance of five regulators (including Financial Services Agency in Japan and Financial Conduct Authority in the UK) and 17 financial institutions (such as Ant Group, Citi Group, UOB). The announced participation of the IMF is considered a critical enabler to drive the expansion of asset tokenisation and decentralised finance. Supported by market research, broader collaboration with more regulators and private firms is still necessary to scale the innovations of the six key trends to drive interoperability.

Read our strategy briefing on Embedded Finance Revolutionising Cross-Border Transactions, for further details on cross-border transactions. For embedded finance, our strategy briefings discuss the driving factors, and key products, providing actionable insights.