Of nude selfies as collateral, and S'pore's 'trust' advantage

It is easy to get carried away by technoevangelism these days, when rock-star technopreneurs, such as Mark Zuckerberg and Elon Musk, paint their visions of a better world, driven by technology.

Whether it's healthcare, education or communications - really, any aspect of our lives - the possibilities are endless.

For Singapore, a regional financial hub, the prospects presented by the future of banking are especially exciting. The Republic could very well be a node from which technology will drive new ways of borrowing money, seamless online transactions, and more transparent trade flows, among other things.

Many are calling this the age of the "unicorn" - start-ups which have been valued at US$1 billion (S$1.4 billion) or more would have been mythical creatures just 10 years ago but, today, there are close to 170 unicorns, including Uber, Xiaomi and Airbnb.

However, it is also important not to ignore the elephant in the room: Technology has its pitfalls, too.

The continued advancement of technology will lead to job losses at a magnitude that nobody can ascertain today. As financial institutions increasingly adopt robotics, artificial intelligence and automation, it will not just be lower-skilled paper pushers who will be displaced, but highly skilled professionals too.

Maybank foreign exchange (FX) research head Saktiandi Supaat, during the roundtable, said he has been seeing rising numbers of FX platforms providing trading services at cheaper rates than banks.

So, the banks' traditional client base - small and medium-sized enterprises and bigger corporations - no longer need to go to a bank to get a quote for currency exchange.

As these online platforms gain traction and as banks themselves step up the electronification of their FX platforms, FX sales staff and even traders may lose their jobs, said Mr Saktiandi, who is also an MP for Bishan-Toa Payoh GRC.

Technology will not only disrupt businesses and financial institutions, but individual lives, too, reshaping the way we interact and communicate with each other.

This was something I touched on during the roundtable. Who would ever have predicted, for example, that mobile apps offering loans to individuals could lead to a situation where vulnerable women are made to send nude selfies as collateral, and then are blackmailed when they cannot repay their loans?

Yet, this is something that has happened in China. How else could technology in future be used and abused by society? It is almost impossible to predict.

In the face of these unknown challenges, the Monetary Authority of Singapore's (MAS') assistant managing director of the development and international group, Mr Leong Sing Chiong, said the regulator would take a risk-based approach.

"If you're a small player, you don't do very much harm. However, if you grow to a certain size, whereby the scale of your activities becomes significant, then it is important for MAS to know how you conduct your business, and whether you are conducting your business in a sound manner," he said.

He added that regulation would be proportionate to the risks associated with these players.


But if we're talking about a future where the impact of financial technology goes way beyond monetary concerns, and could have wide social and societal implications, we also have to consider that the MAS' current toolkit may need to evolve along with the financial landscape.

DBS Group Holdings chief executive Piyush Gupta made this point, too, saying that businesses, regulators and society as a whole will have to work together to come up with new ways to maintain trust and confidence in a world where data is captured quickly and flows freely, for both good and ill.

But he also made a reassuring point - that Singapore is a prime location for such experimentation.

"Singapore is uniquely positioned to create the enabling rules of such a society and such an environment. And we can do that because we are a small nation-state.

"We are a living lab. Can you imagine trying to establish these kinds of rules in China? Forget it. But we could figure out a set of rules in Singapore that the private sector and the public can come to some agreement on."

There is no time to lose.

As someone who keeps up with every change in social-network privacy settings and tries reasonably hard to keep my personal and financial data secure, I still find it difficult to know who is tracking me, and what they are tracking.

Consumers and investors can arm themselves with information, but regulators have a role to play, too, in getting companies to clearly disclose the information they collect on their customers and how they are using the data.

Businesses, including financial institutions and fintech start-ups, have to commit to a social accord to being transparent if they want to continue operating in a society that trusts them.

A version of this article appeared in the print edition of The Sunday Times on August 14, 2016, with the headline 'Of nude selfies as collateral, and S'pore's 'trust' advantage'. Print Edition | Subscribe