Singapore has been ranked 7th most innovative country in the world but are we prepared for it?
Singapore is now amongst top countries in the world like Switzerland and Sweden in terms of innovation. While this city-state is capable of building a robust ecosystem for entrepreneurs, investors, corporations and research institutes, it is constantly pressured to tackle macro problems such as talent acquisition, chronic labour shortage and an aging population.
With one of the highest global standards of living, it is thus pertinent for Singapore to prepare against potential challenges that may weaken any sustainable growth in the long term. As an innovation hub, it naturally attracts investments and talent alike. But what are the ongoing strategies that Singapore need to continue in its attempt to not only tackle the macro problems, but maintain its position as a nation of limitless innovation?
Innovation within regulatory sandboxes
With innovation comes the risk and the discovery of the unknown. However, Singapore ensures a level of controlled risk through regulatory sandboxes before any implementations or process towards mainstream. These sandboxes were rolled out to allow for solutions (and innovation) to be trialled before execution. As a result, regulatory sandboxes provide a cushion against failures within a certain framework of risk. One example is an initiative that has been recently introduced by the government – a "Data Sandbox Programme" for companies and agencies to exchange and analyse big data.
Innovation in the financial sector
In addition to the above mentioned, the Monetary Authority of Singapore (MAS) has also set up a regulatory sandbox that facilitates innovation in the financial sector and encourage the adoption of technology for increase of efficiency and the creation of opportunities.
As a result, financial institutions are further encouraged to enhance connectivity and Fintech innovation through Application Programming Interfaces. Collaborations between technological firms and financial institutions are also surfacing to create common utilities, such as electronic payments, digital ID, and electronic know-your-client checks.
Currently, the MAS is committed to facilitate and invest in R&D for development of new solutions, including the use of distributed ledger technology for inter-bank payments and trade finance. It is also looking to expand the web of cross-border cooperation agreements with other key Fintech centres, which can help Singapore to grow as a base to attract foreign Fintech start-ups. In addition, it will be able to harness technology to simplify regulatory compliance within financial institutions.
MAS will continue to enhance its regulatory approach, to support enterprise and innovation, while maintaining financial soundness. Key priorities include the assurance that regulations set are supportive towards innovative business models and the strengthening of cyber resilience within financial institutions.
What are other trends that we are likely to see in 2018?
Experimentation with new financial products and services within a controlled environment have resulted in cost-savings and this is likely a trend that will pick up amongst Fintech and start-ups alike.
Artificial Intelligence (AI) is also a burgeoning trend within the financial sector as it provides immense room for innovation and creativity that will bring about better catered services and user experiences for customers.
In 2016, the government committed S$19 billion to support R&D over the next five years. And earlier this year, they announced that more than $100 million would be invested into local efforts within artificial intelligence — which is still at its nascent, experimental stages — over the next five years.
To meet impending demand for AI, the Info-Communications Media Development Authority (IMDA) would be matching businesses with suppliers of AI technology and co-fund the development of AI projects and prototypes. Small and medium-sized enterprises (SMEs) can also take advantage of the SMEs Go Digital programme to learn how to apply AI technologies to solve business problems and ease banking experiences.
To ensure Singapore has the talent it needs to drive AI adoption, IMDA is starting an AI apprenticeship programme to train 200 professionals over the next three years, allowing trainees to hone their skills through attachments at partner organisations and other AI courses conducted by educational institutions.
Building a culture of innovation in Singapore
Although the government has initiatives geared towards innovation, research has shown that Singapore generally has a risk-averse culture and this can impact its ability to prepare the younger generations for the future workplace environment.
“One mistake we make about innovation is to think that it is about brains; it is really about minds,” said Mr Bruno Lanvin, Executive Director of INSEAD. “It is about encouraging diversity and different ways of thinking.”
Although Singapore is still an uncontested player amongst smaller or emerging Asian economies, countries such as Vietnam, Philippines and Thailand are rapidly catching up. Singapore needs to continuously take advantage of its melting pot culture that results in great ideas and innovation to attract and retain talent.
Both existing groups of employees with years of experience and the young who are looking to venture into the financial sector as a career would also need to ensure that skills acquired would not become obsolete due to fast-changing trends and advancements of the sector. If your organisation is looking to increase your hiring for the new year or would like to find out more about talent strategies within the market, please kindly connect with Naufal Bin Omar Ashiblie. You may also follow our LinkedIn page if you would like to be updated on other industry related insights.
Sources: CNBC, Finextra, TODAY Online, Monetary Authority of Singapore (MAS), Info-communications Media Development Authority (IMDA)