I agree that technology companies should compete with traditional banks on a level playing field (DBS boss urges closer scrutiny on non-bank firms entering fintech; Sept 7).
The Monetary Authority of Singapore should evaluate such non-bank firms' transactions in terms of efficiency, financial stability, consumer protection and integrity, security risk and data protection. Access to customer data must be regulated in the same way as traditional banks.
It is just a matter of time before tech giants offer comprehensive banking functions.
The financial service sector is perhaps the most heavily regulated industry in the world and, as tech firms move in, they should not be exempted from the close scrutiny and stiff rules. The regulatory bodies, however, have some ground to cover to understand and keep up with the rapidly evolving fintech firms.
These firms should work with regulators to develop solutions specific to the regulation of their product offering. The public will better benefit from such regulatory oversight.
Fintech applications are diverse and serve a wide array of individuals through their accessibility and ease of use. As fintech applications grow in sophistication, there could come a time when individuals with no bank account can still enter the financial ecosystem via such fintech firms. This is a serious challenge for banks.
One way for banks to compete is to attract customers to use their facilities. How?
First, banks should waive the fees to maintain customer accounts as well as the minimum balance.
Second, the reams of documents customers are required to fill are not only tedious but can also easily mask key information that customers need to be aware of, such as fees and conditions that lead to the triggering of fees.
Traditional banks should remove these barriers.
Cheng Choon Fei