Navigating the regulatory landscape and risk management with MAS ASEAN Fintech 2021 Winner

Ekta Singh, Regtech SubComm Member at Singapore FinTech Association (SFA), believes that “Compliance is about doing ethically right things all the time, differentiating between business and good business”.

Having been in the financial services industry for over 10 years, Ekta believes in taking a collaborative approach to leadership and likes to bring together experts with diverse cultural and linguistic backgrounds. As Regtech SubComm Member at SFA, Ekta is passionate about protecting customers from financial risk while complying with regulatory requirements. She believes that Fintech can revolutionise the way we interact with money and its agility is something that attracts the best minds in the finance sector.

In this interview, Ekta tells us why technology can be used to improve customer service, her excitement for the development of new financial products using blockchain-based applications that allow more secure and transparent financial transactions and why FinTech has the potential to help people who have been traditionally excluded from the financial system.

As Fintech momentum builds and continues change the way people interact with money - we asked Ekta how she supports tech-driven companies to adapt to the change in financial landscape and how wider adoption of decentralised finance and cryptocurrency has impacted their business.

Can you tell us about your background, responsibilities and what you’re most passionate about within the FinTech industry?

I have been working in the financial services industry for over 10 years, and I have held a variety of roles, including front-line banking, compliance coordinator, operation and general management. Hence was responsible for growth, garner new business, sales management, compliance onboarding, branch operation. Because of these responsibilities I gained deep understanding of client engagement, business development, compliance, problem solving and operational efficiencies.

In my current role as a Regional head of compliance, I’m responsible for developing and implementing policies and procedures, conducting risk assessment, promoting compliance culture and providing training to employees.I believe Fintech has the potential to revolutionise the way we interact with money and its agility is something that attracts. It’s exciting to be a part of this industry and to help to shape its future – I'm particularly interested in the use of technology to improve customer service, reduce fraud, and make financial services more accessible to everyone.

Here are some aspects of the Fintech Industry that interest me the most:

• Improving CX: Technology can be used to provide customers with more personalized and efficient experiences such as Chatbots.
• Development of new financial products and services: I am excited to see how new technologies can be used to create new financial products and services that meet the needs of customers. For example, development of blockchain-based applications that could provide more secure and transparent financial transactions.
• Financial inclusion: FinTech has the potential to help people who have been traditionally excluded from the financial system. For example, use of mobile money to provide financial services to people in rural areas.

Having won the Monetary Authority of Singapore’s ASEAN Fintech Award in 2021 – how have you continued to support tech-driven companies following the changes to the financial landscape in the last few years and how has the wider adoption of decentralised finance and cryptocurrency impacted your business?

The changes to the financial landscape in recent years have been significant, and the adoption of decentralized finance and cryptocurrency has only accelerated these changes. As a compliance officer for a crypto firm, I have had to adapt my approach to supporting tech-driven companies to remain compliant with the evolving regulatory landscape while also supporting our clients as they navigate this rapidly evolving space.

One of the key ways is to work closely with regulators to stay up-to-date on the latest developments and proactively adapt to new compliance solutions that meet the needs of our tech-driven clients. For example, we have developed a risk-based approach to AML compliance that allows us to effectively manage our risk while minimizing the burden on our clients. Another challenge has been the need to develop new compliance tools and procedures. The traditional compliance methods are not always effective in the crypto space, so we have had to develop new ways to identify and mitigate risks.

We have done this by using innovative technologies, such as blockchain analysis and machine learning. Engaging with service providers like Elliptic for wallet screening and transaction monitoring, worldcheck for name screening, to screen for PEP, adverse media hit, sanction risk, Fireblocks provides a secure network to allows to move the digital assets. There are some firms in payment and digital industry who use other providers to help them not only leverage technology but also stay compliant with the regulatory requirements for eg, firms implementing travel rule, solution providers like Notabene, Sygna etc , video verification from Jumio, Onfido etc is helpful as well. All these innovative technologies help compliance team to carry on their work more efficiently from customer due diligence, transaction monitoring to sanction screening.

In Asia, there are constant changes to the regulatory landscape with never-ending compliance requirements evolving all the time. How do you stay up-to-date and adapt your products in accordance with changes? Can you provide examples of instances where you have effectively responded to regulatory changes, ensuring compliance while still making sure are reducing the risk of fraud and protecting customer data?

The different ways to stay up-to-date with regulatory changes are:

1. Monitor regulatory developments: review new regulations and guidelines, and identify any potential impact on your products and services. Constantly scanning the news, reviewing regulations, and attending industry events to stay ahead of the curve.
2. We must have robust compliance framework that allows us to implement changes quickly and effectively. This includes risk assessment process which involve identifying the risks associated with products and services like financial loss, reputational risk, legal liability. Change management process ensures that timely implementation and change done in efficient manner while minimizing the risk of disruption to the business for eg. enhance policies, update teh training program, changes to software system. This involves proper communication with stakeholders. Training program for our staff ensures that staff are aware of latest regulations and how these changes affect our product and services, identify teh risk, mitigate teh risk, update customer.
3. Build a Strong culture of compliance within your organization and it starts with leadership. we need to set the tome from top so that every staff is clear that the importance is the priority in te organisation. Via regular training it gets further embedded and employees are aware on how to identify and report any compliance risk. This also means that culture of open communication should be encouraged without any fear of retaliation.On the other hand employees to be rewarded for complying compliance obligations especially when it has helped prevent ML/TF risk or any other compliance risk. Whistleblowing policy provides a formal mechanism for employees to report compliance risks.
4. Have strong relationship with regulators. I am active working group member of ACCESS, SFA and participate in various MAS consulting papers. We interact with regulators regularly to discuss compliance program and to get their feedback. Example that I can pen down where changes were made in response to regulatory requirements are: Monetary Authority of Singapore (MAS) introduced new Guideline for risk disclosures especially for retail clients. We worked closely with MAS to understand the new requirements, and made the necessary changes to our products and services to ensure compliance. In 2022, the Financial Action Task Force (FATF) updated its guidance on virtual assets. I am member of GDF and participated in CDD questionnaire for VASP’s. Reviewed the new guidance and made the necessary changes to AML/CFT policies and procedures.

To reduce the risk of fraud and protect customer data, we should look at using strong encryption and security measures to protect customer data, have a robust fraud detection system that helps to identify and prevent fraudulent transactions, have a team of dedicated fraud analysts who investigate suspicious activity and have a process for quickly responding to incidents of fraud.

We should be committed to providing a safe and secure environment for our customers to do business.

Can you tell us about RWAR, the (Real World Asset Repository) - your solution that aims to offer a transparent, and secure way to invest in real-world assets and making it easier for liquidity providers to invest in asset-based financing and how you’re ensuring data safety and security?

It’s about tokenizing the real-world assets which is recognized by the liquidity pool providers. So, when a SME needs liquidity, they provide real world assets (trade invoices etc). SME/borrower are onboarded after through KYC, due diligence. Credit assessment token and risk assessment token of this collateral is done. Liquidity pool providers recognises this token and credit is issued to borrower. Borrowers choose a way to receive financing capital either by receiving the loans in their business bank account or executing direct digital payment to borrowers’ vendors. On and off ramp service is used to facilitate the crypto to fiat conversion and credit borrowers bank account.

Asian FinTech's have gained considerable momentum and market share in recent years. What unique growth factors do you believe have contributed to the success and rapid growth of Fintech companies in the Asian market?

I feel some of the unique growth factors that have contributed to the success and rapid growth of fintech companies in the Asian market are firstly, Asia is home to a large and growing population, with a high proportion of young and tech-savvy people and large pool of talented engineers and entrepreneurs. This provides a large and growing customer base for Fintech companies and also provide conducive environment to develop and launch fintech businesses.

Secondly, Many Asian governments have been supportive of the development of fintech, and have implemented regulations that are designed to promote innovation and competition. This has created a favourable regulatory environment for fintech companies to grow and develop.

Thirdly, the cost of entry into the fintech market in Asia is relatively low. This allows new companies to enter the market and compete with established players.

Lastly, there is a growing acceptance of digital payments in Asia, and this is opening up new opportunities for fintech companies to provide financial services to this market. Mobile payments, e-commerce are popular and this has created a major opportunity to provide mobile-based financial services and online payments. The technological development is rapid thus creating an environment where Fintech companies can innovate and develop new products and services.

We are also seeing that There is a growing demand for financial inclusion in Asia, large number of people are still unbanked or underbanked and this has led to the development of Fintech solutions that can provide financial services to people who have been traditionally excluded from the financial system.

Can you provide examples of specific market conditions or regulatory developments that have influenced the growth of Asian FinTech's?

When we talk of specific market conditions or regulatory developments that have influenced the growth of Asian fintech’s, few key examples that I can pen down are rise of mobile payments and growth of e-commerce. There are many firms that provide payment processing services for e-commerce merchants, or offer lending services to consumers who are shopping online and mobile-based financial services. For example, Alipay and WeChat Pay.

Fintech companies are well-positioned to provide financial services to underbanked or non-banked people and to help them to achieve financial inclusion. For example, the Indian government has launched a number of initiatives to promote financial inclusion, and fintech companies have been playing a key role in these initiatives.

There is introduction of Regulatory sandboxes which help fintech companies to test new products and services in a live environment without having to comply with all of the regulations that apply to traditional financial institutions. This has allowed fintech companies to experiment and innovate more quickly, and it has helped to create a more supportive regulatory environment for fintech in Asia. There is adoption of open banking regulations which has given fintech companies the opportunity to develop new products and services that are more personalized and relevant to customers. Government continue to pursue open banking opportunities and encouraged banks to adopt APIs by launching numerous initiatives such as the API Exchange (APIX) in 2018, the Singapore Financial Data Exchange (SGFInDex) in 2020, and the Singapore Trade Data Exchange (SGTraDex) in 2021. There are Data protection regulations have helped to protect customer data and to create a more secure environment for fintech. Some governments in Asia have established fintech hubs that provide support and resources for fintech companies. These hubs can help fintech companies to connect with investors, to find talent, and to navigate the regulatory landscape.

As the Asian market continues to grow and develop, we can expect to see even more innovation and growth in the fintech sector.

The Fintech landscape is constantly evolving, both in Asia and globally which is adding increased pressure on cyber security and data safety measures – how are you addressing these concerns?

Cybersecurity and data safety are two of the most important concerns for fintech companies today. As the fintech landscape continues to evolve, so too do the threats to cybersecurity and data safety. In order to protect our customers and their data, we should be committed to taking a proactive approach to cybersecurity and data safety. Some ways which can be used to address these concerns are to use variety of security measures to protect our data, including firewalls, intrusion detection systems, and encryption. Have a strict policy of employee training on security best practices and conduct security audits. Regular training on cybersecurity best practices and having code of conduct that outlines company expectations for employee behavior should also be followed.

Fintech firm should have dedicated team of cybersecurity professionals who are responsible for monitoring and managing our cybersecurity risks. This team should constantly work to identify and mitigate new threats, and be responsible for implementing and maintaining cybersecurity policies and procedures. artificial intelligence and machine learning can be used to improve the ability to identify and respond to threats.

It's important to be transparent about your security practices. Provide customers with information about the security measures that you use, and we also explain how they can protect their own data. Respond to customer concerns promptly, this helps in building customer trust which is essential for a successful fintech company.

And, most importantly, be compliant with the latest regulations. Work closely with regulators to ensure that you are compliant with all applicable laws and regulations. Participate in industry organizations that promote cybersecurity and data safety.

With these steps, I think, we can address the cyber security issue and data protection concerns and make the fintech landscape more secure for everyone.

What can the audience expect to get out of FinTech Connect 2023 and why is it an event not to be missed?

For anyone who is interested in the future of fintech, then FinTech Connect 2023 is the event to go to, which features a wide range of speakers, including CEOs, founders, and regulators, who will share their insights on the latest trends and developments in the fintech industry. This well-organized event is a great opportunity to network with other professionals in the industry, meet potential investors, partners and customers.

The exhibition showcases the latest product and services from the Fintech companies. Regulators who attend the event, provide insights into the latest regulatory trends and requirements. The number of keynote presentations and panel discussions from experts provide insights into latest trends like AI, blockchain, open banking, machine learning etc. Overall, FinTech Connect 2023 is a nice event not to be missed.