Fintech 2025

SINGAPORE Trends and Developments Contributed by: Adrian Ang, Alexander Fong and Benjamin Samynathan, Allen & Gledhill LLP

Introduction Singapore’s vibrant fintech ecosystem has led to a rich and varied scope of business models over the years. In 2015 and 2016, peer-to-peer lending and equity crowdfunding platforms were active in the market. In 2017, more robo-advis - ers began to set up shop in Singapore, and there was global interest in initial coin offerings and cryptocurrency exchanges. From 2018 onwards, there was a flurry of activity in the fintech space ranging from e-wallets, remittance businesses and digital banks, to cryptocurrency funds, security token exchanges, and cryptocurrency broker-dealing and market making. In recent years, broad trends have continued to develop with a particular focus on artificial intelligence (AI) and payments. This piece will focus on how the following key trends might play out in Singapore, in 2025: (i) increased adop - tion of AI and the potential resurgence of “robo- advisers” ; (ii) “single-currency stablecoins” and the new regulatory framework proposed by the Singapore financial services regulator and cen - tral bank, the Monetary Authority of Singapore (MAS); (iii) an increased focus on consumer pro - tection; and (iv) increasing regulatory safeguards to address scams and responsibility for losses. AI and “Robo-Advisers” MAS has expressly recognised the role that AI plays in the financial services industry and has done so while highlighting the data protec - tion and cyber security risks which accompany increased adoption of AI. In a media release announcing its commitment of up to SGD100 million to support quantum and AI capabilities in the Singapore financial sector through the Finan - cial Sector Technology and Innovation Grant Scheme, MAS noted that there are “strong pros- pects” for AI applications in the financial services sector, and this involved “the development of

frameworks and platforms for policies and pro- tocols that enable secure and privacy-protected data exchange where financial institutions can collaborate on industry-wide use cases” . In connection with the above, in July 2024, MAS published an information paper on Cyber Risks Associated with Generative Artificial Intelligence (GenAI), which summarised GenAI-enabled threats to include deepfakes, GenAI-enabled phishing, as well as malware generation and enhancement. At the time of the information paper, MAS proposed various mitigating meas - ures. These included: • implementation of liveness detection tech - niques in facial recognition authentication; • campaigns to raise user awareness; • additional verification for high-risk transac - tions; • including deepfake attach scenarios in inci - dent responses; • adopting multi-layered cyber defence; and • incorporating AI tools to detect malware and to better identify suspicious activity. Mitigating measures to address data leakage from GenAI deployment also included estab - lishing user policies specific to GenAI usage, and adopting best practices (ie, secure coding, vulnerability assessments and security testing), and performing due diligence when using GenAI solutions. The information paper also highlighted the potential for bad actors to introduce malicious or inaccurate data to “poison” GenAI models and their outputs, whether at training or during use. Mitigating measures likewise focused on data governance, access controls and monitoring, and incorporating contingencies into business continuity plans.

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