Ravi Menon, managing director of the city state's central bank, the Monetary Authority of Singapore (MAS), reportedly told The Business Times that MAS will look to introduce new cyber rules in a bid to encourage greater adoption of online and digital banking.
According to The Business Times report, Menon said: "The use of technology is not going to take off if we have not successfully addressed the cybersecurity problem, and assured ourselves and Singaporeans that cyber risks are reasonably well mitigated. MAS has been raising the level of expected standards for cyber risk-management. We want to do some things through regulation, in terms of setting requirements for cyber."
"Cyber risk is the least known risk of all the major risks facing banks. The models to track, manage and mitigate these risks are not as well developed as the models for the more traditional areas," he said.
According to the report, there are more than 400 financial technology (fintech) companies now operating in Singapore, while 20 global banks and insurers have also established innovation labs within the country.
In June 2016, MAS announced plans to create a regulatory sandbox to support innovation in fintech. Under the scheme, financial services firms, technology companies and other "non-financial players" in Singapore have the chance to test new fintech products and services in an environment where some regulatory requirements are relaxed. The scheme is similar to others established by financial regulators around the world, including in the UK where the Financial Conduct Authority (FCA) pioneered the concept.
In March this year, MAS approved the first company to participate in its regulatory sandbox.
Menon said MAS has received more than 30 applications in total from businesses seeking to participate in sandbox testing, more than 80% of which have come from fintech startups, according to The Business Times report.
Menon admitted, however, that businesses have faced delays in winning approval from MAS for sandbox testing.
"One would have hoped we could have approved sandbox applications in weeks rather than months. But, we are learning ourselves - we're in the sandbox, too," Menon said, according to the report. "We are working out reduced requirements, looking at what are the requirements we can lift."