A Report by CYS Global Remit Human Resource Management Unit
Last Saturday, CYS Global Remit hosted its second FinTech Forum at the American Club. The CYS FinTech Forum 2024 is a crucial element of our ongoing efforts to raise awareness and provide insights into our developments in financial technology. This event offers our diverse stakeholders an opportunity to understand the direction CYS Global Remit is heading in the coming years.
The half-day forum featured over ten speakers covering various topics related to the payment industry. Below is a full reprint of the opening speech given by our Chief Executive, Ms. Ann S. K. Wee.
"Introduction
Welcome all of you and thank you for joining us this morning in our CYS FinTech Forum 2024, our second one in a row. We are gathered here to explore some of the most transformative trends shaping the global financial landscape as well as our payment industry. As the world navigates through these changing times, it is crucial for us to understand and anticipate the impacts and opportunities they present.
I will open the Forum by delivering a speech on the profound changes that our financial landscape is undergoing rapidly. I have chosen five fast-emerging phenomenon or development that will impact our payment industry in the very near future, and they are:
The Impact of De-dollarisation and the Rise of BRICS Currencies
The Rapid Development of Digital Currency and its Impact on Cross-Border Payments
Popular Adoption of E-money in Singapore and Its Key Benefits
Mobile Banking of the Future
Generative AI in Payment Industry
Without further ado, let I start now.
1. The Impact of De-dollarisation and the Rise of BRICS Currencies
Firstly, let's discuss the impact of de-dollarisation. The global financial system has long been anchored by the US dollar. However, recent geopolitical and economic developments have seen a gradual shift away from this reliance. Countries are increasingly seeking to reduce their dependency on the dollar, opting for alternative currencies to gain economic sovereignty and stability. This trend, known as de-dollarisation, has significant implications for international trade, investment flows, and global economic stability. As businesses and governments adapt to this shift, we must prepare for a multi-currency world where cross-border transactions become more complex yet potentially more balanced.
Simultaneously, BRICS currencies are gaining momentum. These nations are actively promoting the use of their local currencies for trade and investment, driven by rapid economic growth, bilateral trade agreements, and digital currency innovations.
BRICS is an intergovernmental organization comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. And just this week, Malaysia Prime Minister Anwar Ibrahim has announced that Malaysia will join the BRICS economic bloc, becoming the latest country to take part in an expanding group, which was designed to bring together the world's most important developing countries, to challenge the political and economic power of the wealthier nations of North America and Western Europe.
Several factors are driving the rise of BRICS currencies. Firstly, the sheer economic growth of these nations makes their currencies more attractive for international trade and investment. Secondly, BRICS countries are forming bilateral trade agreements that encourage the use of their own currencies, reducing their reliance on the U.S. dollar. This not only cuts transaction costs but also enhances economic sovereignty.
The combined effect of de-dollarisation and the rise of BRICS currencies will reshape global trade and finance in several ways:
Diversified Trade: Reduced reliance on the U.S. dollar will lead to more diversified and resilient global trade patterns.
Economic Stability: Nations can better manage economic shocks by holding diversified foreign reserves.
Geopolitical Shift: Increased influence of BRICS currencies will alter the geopolitical landscape, emphasizing the importance of multilateralism and economic collaboration.
In short, the trends of de-dollarisation and the rise of BRICS currencies are ushering in a transformative era in global finance. While this transition comes with challenges, it also offers opportunities for a more inclusive, stable, and balanced international financial system. CYS is closely monitoring the situation and remains at the forefront of connecting BRICS currencies for our customers as the pace of de-dollarisation accelerates.
2. The Rapid Development of Digital Currency and its Impact on Cross-Border Payments
Parallel to de-dollarisation is the rapid development of digital currencies. Central banks across the globe are exploring or already implementing digital versions of their currencies, such as Central Bank Digital Currencies (CBDCs). These digital currencies promise to enhance payment efficiency, reduce transaction costs, and improve financial inclusion.
The rapid development of digital currencies is poised to revolutionize cross-border payments and the impact is particularly transformative:
Speed and Efficiency: Traditional cross-border payments often take days to clear and settle. Digital currencies enable near-instantaneous transactions, drastically reducing wait times and improving business operations.
Reduced Transaction Costs: Cross-border transfers typically come with high fees due to the involvement of multiple banks and intermediaries. Digital currencies bypass many of these intermediaries, significantly lowering costs.
Financial Inclusion: Digital currencies can bring financial services to underbanked and underserved populations, fostering greater global economic participation.
Transparency and Traceability: Blockchain technology provides a transparent and immutable record of transactions, enhancing compliance and reducing the risks associated with money laundering and other illicit activities.
However, they also raise questions about regulatory frameworks, cybersecurity, and monetary policy implementation. As we adapt to this new landscape, collaboration between governments, financial institutions, and technology providers will be essential to address the associated challenges and fully realize the benefits of digital currencies.
3. Popular Adoption of E-money in Singapore and Its Key Benefits
The next topic brings us closer to home—the popular adoption of e-money in Singapore. Our nation has always been at the forefront of financial innovation, and the widespread acceptance of e-money is a testament to this. From digital wallets to contactless payments, e-money has revolutionized the way we conduct transactions.
The popularity of e-money in Singapore is driven by several key benefits:
Convenience: E-money allows users to make instant payments anytime and anywhere, eliminating the need for physical cash or cheques.
Security: Advanced encryption and authentication technologies make e-money transactions secure, reducing the risk of theft and fraud.
Inclusivity: E-money platforms provide access to financial services for unbanked and underbanked populations, fostering greater financial inclusion and empowerment.
Efficiency: Businesses benefit from quicker transaction processing and lower administrative costs, enhancing overall operational efficiency.
As technology continues to evolve, Singapore can anticipate further innovations in e-money, including enhanced cross-border payment capabilities, integration with emerging digital currencies, and more sophisticated financial services tailored to individual needs. This shift not only enhances consumer experience but also propels Singapore toward becoming a truly cashless society.
4. Mobile Banking of the Future
Looking ahead, let's explore the future of mobile banking. Mobile banking has already transformed how we manage our finances, providing unprecedented access and convenience. However, the future holds even greater promise. We can expect more personalized banking experiences powered by artificial intelligence, increased integration with other financial services, and enhanced security measures to protect against evolving cyber threats. The future of mobile banking is one where customers can seamlessly conduct all their banking needs through their smartphones, anytime and anywhere, with utmost security and efficiency. One of them is cross-border payment.
In today's globalized world, the ability to conduct seamless cross-border transactions is essential for individuals and businesses alike. Mobile banking has emerged as a powerful tool, revolutionizing cross-border payments and bringing unprecedented convenience, efficiency, and accessibility.
Mobile banking allows users to conduct financial transactions anytime and anywhere, eliminating the need for physical visits to banks. This convenience is particularly valuable for cross-border payments, where traditional methods often involve lengthy processes and physical paperwork. With just a few taps on a mobile device, users can send and receive funds globally, making international transactions as easy as local ones.
Traditional cross-border payments often come with high fees and extended processing times due to the involvement of multiple intermediaries. Mobile banking solutions streamline this process by leveraging digital platforms and cutting-edge technology. This not only reduces transaction costs but also significantly shortens processing times, enabling near-instantaneous transfers.
Such efficiency is crucial for businesses that rely on timely payments to maintain operations and for individuals sending remittances to family members abroad.
Security is a paramount concern in cross-border transactions. Mobile banking platforms incorporate advanced encryption, multi-factor authentication, and real-time monitoring to safeguard users' financial information and protect against fraud. Additionally, mobile banking provides transparency, allowing users to track their transactions in real-time and receive instant notifications, ensuring peace of mind.
Mobile banking is transforming the landscape of cross-border payments by enhancing convenience, reducing costs and processing times, ensuring security, promoting financial inclusion, and facilitating innovation. As CYS embraces these advancements, we move towards a more connected and efficient global payment system in the very near future.
5. Generative AI in Payment Industry
Finally, let's delve into the role of generative AI in the payment industry. Generative AI, with its ability to analyse vast amounts of data and generate insights, is poised to revolutionize payments. It can streamline operations, enhance fraud detection, and personalize customer experiences. By predicting spending patterns and detecting anomalies, generative AI ensures smoother and safer transactions. Furthermore, it can automate routine tasks, allowing financial institutions to focus on innovation and customer service.
CYS launched its Transaction Monitoring Compliance (TMC) in June 2023, a “machine-learning” real-time pre-transaction monitoring system developed by Cylynx®. The solution is the use of Artificial Intelligence through machine learning algorithms. These algorithms can analyse vast amounts of data, identify patterns and trends, and make predictions about future events. This enables CYS TMU to identify and prevent fraudulent activity before it occurs, rather than reacting after the fact. These could also enable CYS to tailor customized AI models across different segments of customers.
Another CYS AI initiative is a partnership with Onfido to implement biometrics verification in the use of non-face-to-face (NFTF) measures and technologies as part of their Customer Due Diligence (CDD). Onfido is a technology company that helps CYS to verify a person’s identities using photo-based identity documents, selfies, and artificial intelligence algorithms.
In Conclusion
The financial landscape is undergoing rapid and profound changes. The shift away from the dollar, the rise of digital currencies, the widespread adoption of e-money, the evolution of mobile banking, and the integration of generative AI are all shaping a new era of finance. At the heart of these changes lies a commitment to innovation, security, and customer-centricity.
As we move forward, let us embrace these transformative trends with an open mind and a proactive approach. Together, we can navigate these changes and build a more resilient, inclusive, and efficient financial system for the future.
Thank you.”
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