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ISCA CEO, Mr Lee Fook Chiew, was quoted in The Business Times on the question of "How do you see the impact of digital banks in Singapore? What potential risks should we watch for?" This is what he has to share:
The introduction of digital banks should further promote healthy competition and innovation in the banking sector as well as collaboration between financial and technology companies. At the same time, traditional banking players may adapt their business models to maintain their competitive advantage. The emergence of digital banks will also accelerate the establishment of more defined regulatory regimes around fintech, digital banking and lending. In terms of audit requirements, certain traditional audit approaches may not work and will need to keep up accordingly. Furthermore, the audit of IT security, systems logic and algorithms may become more prominent.
Key to the success of the digital banking regime is to ensure a fair playing field between incumbents and the new entrants, while not being overly punitive with high barriers to entry that make digital banks uncompetitive. Hence, it may be necessary to evolve regulations concerning capital and liquidity requirements as well as the approach towards calculating risk weighted assets.
- Lee Fook Chiew, Chief Executive Officer, Institute of Singapore Chartered Accountants (ISCA)
This article was first published in "Views From the Top" in The Business Times on 8 July 2019.
