In his opening address at SFF X SWITCH 2020, Deputy Prime Minister (DPM) Heng Swee Keat announced the launch of the Singapore Financial Data Exchange (SGFinDex). This is the world’s first public digital infrastructure that allows Singaporeans to obtain their financial information from different financial institutions and government agencies with just their national digital identity, or Singpass, while providing user consent via a centrally managed online consent system.
“People bank with different institutions, trade on different platforms and purchase products from different insurers. When we need to consolidate our finances, this is often onerous,” explains DPM Heng who is also Singapore’s Finance Minister. He believes that such an approach to trusted data sharing via innovation and conducive regulations can also be applied to other areas and jurisdictions too.
According to the Monetary Authority of Singapore (MAS), Singapore’s financial regulator and central bank, SGFinDex was developed by the public sector together with The Association of Banks in Singapore and seven participating banks. Besides accessing personal financial information (e.g. deposits, credit cards, loans) from participating banks, users can also obtain financial information from relevant government agencies like CPF balances and HDB loans too.
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“This will help individuals better understand their overall financial health and plan their finances holistically. In the next phase of SGFinDex, individuals will be able to access information on their insurance policies held with insurers and their holdings of stocks at the Central Depository,” MAS told the media in a press release.
More than just a portal for accessing information, however, the Ministry of Manpower and GovTech developed a digital financial planning service - MyMoneySense. Using SGFinDex, the system offers Singaporeans an overview of their finances as well as trusted, personalised and actionable guidance to allow them to better plan their finances.
“Today, our personal financial information is fragmented across multiple entities, and we often take financial decisions, like making an investment or buying a house, without a holistic view of our financial situation,” says Ravi Menon, Managing Director at MAS. SGFinDex, he says, empowers individuals to consolidate financial information for a comprehensive view of their portfolio, with digital tools like MyMoneySense helping them make better financial decisions.
To ensure data protection of users, SGFinDex will only transmit but not store personal financial data. Retrieval of such data requires the explicit consent of the individual in question, who must verify their identity via SingPass. MAS assures Singaporeans that all transmitted data is encrypted and can only be read on the financial planning applications receiving the data.
Embracing a digital future
DPM Heng also took the opportunity to launch the Asian Institute of Digital Finance, hosted at the National University of Singapore (NUS) and backed by MAS and the National Research Foundation.
One of the Institute’s first projects, says the DPM, will be to build a data sharing platform to train models to improve credit assessments. He sees this initiative improving the financing of small businesses to drive post-pandemic recovery by helping lenders make better credit decisions and offer better rates.
Additionally, DPM Heng also launched the Singapore Blockchain Innovation Programme. Described as “Singapore’s first major blockchain research and translation programme”, the initiative aims to overcome limitations in blockchain technology such as the energy efficiency of processing blockchains and the ability to connect different blockchain systems.
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“The programme will expand blockchain research to the needs of the industry, and will also look into scalability and interoperability of blockchain solutions,” says the Minister.
Further plans for government investment in innovation are underway. DPM Heng shared that the government is finalising its plans for the next five years and will be announcing further details in the coming week. The Singapore government typically invests about 1% of Singapore’s GDP on research and development.
“Covid-19 might have thrown the world a curveball. But it has been an opportunity for people to show resilience in the face of adversity, innovation in the midst of necessity, and the determination to build back better from the crisis,” declared an optimistic DPM Heng. “Just as we innovated to cope with the pandemic, we must also use technology and innovation to emerge stronger from this crisis.”
