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Fintech – The Rewards and the Risks

Is Fintech Opening The Financial Markets up to Risk? The Financial Stability Review (SFR) this year saw the Central Bank Monetary Authority of Singapore (MAS) highlight potential consequences of fintech innovations. Known as a country with lenient regulations and strong support from its government, Singapore has fast become a fintech pioneer. But while these innovations have been flourishing in Singapore, just like it has in other developed and developing countries across the globe, it’s important to consider both the positive and negative aspects of the movement.

The Good – And the Bad

Fintech in the Coming Years - According to MAS It is predicted that fintech payment channels will shoot up by up to 10% in the next two years, and that this figure will get to as much as 50% after five years. And MAS is not the only organization that has been speculating on how the technological leaps will unfold in the near future. In 2014, McKinsey reported that attractive deposit rates could lead to over half of Singaporean bank customers being willing to move their accounts to digital banks. But, even with such bright prospects on the horizon, it is also projected that improper management of fintech innovations and a lack of understanding of risks could destabilize businesses – including digital banks. In conclusion, the report states that banks able to build well-defined digital capabilities leveraging fintech as a cohesive part of its business model would have a higher likelihood of success.

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