SINGAPORE — Greater standardisation of technology applications and seamless data sharing among industry players are crucial elements in the Republic’s journey to become a smart financial centre, Monetary Authority of Singapore (MAS) managing director Ravi Menon said yesterday.

These can help the industry increase efficiency, better manage risks, create new opportunities and improve people’s lives. But to achieve that, industry players and consumers have to realise the “larger collective benefits” of working together, Mr Menon said.

“It is MAS’ conviction that innovation and technology will be critical to the future growth and success of Singapore’s financial sector … At the heart of a smart financial centre must be a progressive information technology architecture. Two key characteristics of such an architecture are common standards and seamless data sharing,” Mr Menon said in the closing speech of the Sibos banking and financial conference.

“The technology behind common standards is not all that complicated and is becoming less of an impediment to systems integration. What is more important is for operators, subscribers and consumers to recognise the larger collective benefits from investing in an infrastructure for interoperability and to work out a framework to ensure its commercial viability for all participants.”

Mr Menon noted one of Singapore’s visions is to have a single, unified point-of-sale terminal that can read all kinds of cards. The Association of Banks in Singapore has formed a working group to look into standardising current point-of-sale applications to operate efficiently and seamlessly.

Currently, multiple point-of-sale terminals are a common sight in the retail payment scene here, which can be “a source of clutter and inconvenience”, he added. And, as more stores and restaurants introduce self-checkout facilities, these multiple terminals can cause confusion as well.

Mr Menon said that while it is good that there is an increase of innovative e-wallets, payment applications and mobile solutions in Singapore, these payment solutions should not be isolated from one another.

The Fast And Secure Transfer is one such electronic funds transfer system that allows banks to collaborate on “innovative payment products that are inter-operable, without having to worry about incompatibility”, he added.

However, Mr Menon suggested going one step further to explore an “all-in-one” system that allows payment using payee’s email addresses or social network accounts. “People should be able to pay each other electronically as simply as writing a cheque or handing over some cash,” he said. “It should not matter which bank that I bank with nor should a payee be identifiable only by his bank account number. Few of us can readily recall our own bank account numbers, let alone be familiar with those of our friends and family.”

On data sharing, Mr Menon said that with the greater availability of data, pooling the relevant ones can help the industry save costs in processing. However, there are concerns about confidentiality and market sensitivity — factors that have held back data sharing among financial institutions. He said that the MAS is looking to overcome this through the publication of open Application Programming Interfaces (APIs), which allow different systems to interact with one another without the need for human intervention.

“Currently, data submission to MAS is still partly manual. We will improve this process. Our vision is for data to flow seamlessly in both directions between systems in the financial institutions and MAS. This will reduce the ongoing cost of regulatory submissions,” Mr Menon said.

“This is not a trivial exercise, given the volume and diversity of financial data. Well-crafted APIs are essential for this vision to work. MAS will closely engage the industry to ensure that these APIs are clear, simple to implement, and extensible.”