Singapore’s central bank chief thinks of fintech as “another hype”

Reading Time: 2 minutes

Singapore’s central bank chief Ravi Menon warned against the wave of technology that’s is currently disrupting the financial services industry, calling such “another hype” in which he does not fully believe.

He said in an interview with Bloomberg TV that while innovation such as blockchain and big data analytics can result in powerful applications, investors should be wary of peer-to-peer lending platforms and cryptocurrencies.

“I do see some collapse of the bubble in the fintech space,” the head of the Monetary Authority of Singapore said.

“Some business models, some applications of technology are clearly overstretched,” he added, citing some similarities with the dot-com boom at the turn of the century. That bubble popped in the early 2000s, erasing billions of dollars in market value from technology stocks.

Menon’s scepticism comes at a time when the city state is positioning itself as a high-tech and innovation hub, aiming to create a lively fintech ecosystem. The Money Authority of Singapore itself co-organises the FinTech Festival, a glitzy networking event that from November 14 to 16 will link banking executives with startups and feature speeches from Menon and former Citigroup CEO Vikram Pandit. Last year’s conference drew more than 13,000 attendants.

However, Menon is particularly criticizing the lack of consumer insight and risk control in some fintech innovations, particularly some examples of peer-to-peer lending, in which platforms anonymously connect investors with borrowers and make money from charging both parties a fee. Such platforms have mushroomed from Asia to the Americas in recent years, and have been hailed for enabling those with poor access to bank loans to get financing from willing investors. But there have also been cases of malfeasance through which investors have been defrauded and lost their investments.

Another area of concern Menon’s is in the use of big data, where increasing use of mobile phones, social media and the Internet has given companies unprecedented access to customer data. Menon is also skeptical of cryptocurrencies as alternative form of money, but not the underlying blockchain technology, which he said was protected by “powerful encryption” and could have some “transformational real-world applications.”

But he conceded that fintech is going to be “the future of financial services in some wy or the other.

“You just have to be discerning – not to be too wide eyed about it, but at the same time, not to be cynical about all new technologies. We should experiment with an open mind,” Menon said.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

Reading Time: 2 minutes

Singapore’s central bank chief Ravi Menon warned against the wave of technology that’s is currently disrupting the financial services industry, calling such “another hype” in which he does not fully believe.

Reading Time: 2 minutes

Singapore’s central bank chief Ravi Menon warned against the wave of technology that’s is currently disrupting the financial services industry, calling such “another hype” in which he does not fully believe.

He said in an interview with Bloomberg TV that while innovation such as blockchain and big data analytics can result in powerful applications, investors should be wary of peer-to-peer lending platforms and cryptocurrencies.

“I do see some collapse of the bubble in the fintech space,” the head of the Monetary Authority of Singapore said.

“Some business models, some applications of technology are clearly overstretched,” he added, citing some similarities with the dot-com boom at the turn of the century. That bubble popped in the early 2000s, erasing billions of dollars in market value from technology stocks.

Menon’s scepticism comes at a time when the city state is positioning itself as a high-tech and innovation hub, aiming to create a lively fintech ecosystem. The Money Authority of Singapore itself co-organises the FinTech Festival, a glitzy networking event that from November 14 to 16 will link banking executives with startups and feature speeches from Menon and former Citigroup CEO Vikram Pandit. Last year’s conference drew more than 13,000 attendants.

However, Menon is particularly criticizing the lack of consumer insight and risk control in some fintech innovations, particularly some examples of peer-to-peer lending, in which platforms anonymously connect investors with borrowers and make money from charging both parties a fee. Such platforms have mushroomed from Asia to the Americas in recent years, and have been hailed for enabling those with poor access to bank loans to get financing from willing investors. But there have also been cases of malfeasance through which investors have been defrauded and lost their investments.

Another area of concern Menon’s is in the use of big data, where increasing use of mobile phones, social media and the Internet has given companies unprecedented access to customer data. Menon is also skeptical of cryptocurrencies as alternative form of money, but not the underlying blockchain technology, which he said was protected by “powerful encryption” and could have some “transformational real-world applications.”

But he conceded that fintech is going to be “the future of financial services in some wy or the other.

“You just have to be discerning – not to be too wide eyed about it, but at the same time, not to be cynical about all new technologies. We should experiment with an open mind,” Menon said.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid