The Monetary Authority of Singapore (MAS) is eyeing enhancing resilience and security of digital financial services via launching stand-in capabilities for NETS electronic point-of-sales systems, and developing similar solutions for QR code payments.
MAS’s Managing Director Chia Der Jiun said in MAS Annual Report 2024/2025 media conference on Tuesday that the regulator is giving particular focus this year to the resilience of retail payments services and it has been in discussion with NETS Group and the banks over the past year and they will soon launch stand-in capabilities for NETS electronic point-of-sales systems.
“This allows customers to continue to make contactless payments at merchant point-of-sale terminals, subject to a transaction limit, when a participating bank’s system is disrupted,” he said.
According to him, MAS will next work with financial institutions (FIs) to develop similar solutions for QR code payments which have been gaining traction as a mode of payment.
“As digital financial services are now pervasive and essential for consumers in daily transactions, ensuring the operational resilience of digital financial services is mission critical for FIs,
“Any prolonged disruption not only brings significant inconvenience to customers but also risks undermining public trust and confidence in FIs,” he noted.
He highlighted that MAS expects FIs to uphold high levels of resilience and availability for the key services they provide, and be able to safely and swiftly recover services when a disruption occurs.
To do this well, he opined that an FI has to apply the standards for disruption and recovery to services and not just systems.
This will require the FI to plan for resilience and recovery across multiple systems to ensure service continuity, he added.
“The financial sector must also start taking steps to build resilience against future threats. The cyber risks arising from quantum computing is one such area,
“While quantum computing is currently not at a mature stage, the technology is developing rapidly and could eventually render current encryption techniques obsolete, putting at risk sensitive customer data and financial transactions,” he said.
Meanwhile, in anticipation of the future threat posed by quantum-powered decryption, MAS has also conducted trials to study the viability of quantum-safe solutions for adoption in financial services.
In November 2024, MAS and Banque de France announced the completion of a milestone experiment using Post-Quantum Cryptography to secure international electronic communications.
Chia has also announced the successful completion of the regulator’s Quantum Key Distribution (or QKD) sandbox, conducted in collaboration with a number of banks and technology partners.
“This sandbox trialled QKD for securing sensitive financial communications. We will soon be publishing a technical report detailing the results and takeaways,
“The report will also highlight challenges for future work. We are confident that further work by the industry can address these challenges and enable wider adoption of QKD in time to come,” he said.
According to him, MAS will also continues to engage FIs to prepare for a quantum-safe transition.
It is noted that MAS published an advisory in February 2024 highlighting measures FIs should consider in their quantum transition efforts.
MAS will also start to engage FIs to prepare a roadmap towards quantum-safe transition, as a full transition is complex and will take time.
“We will review how FIs manage their cryptographic inventory and identify critical assets to be prioritized for quantum-safe migration,” said Chia.
Meanwhile, MAS is bringing together partners through the Financing Asia’s Transition Partnership (or FAST-P) platform to de-risk investments and catalyze the flow of private capital for green and transition projects.
According to Chia, the FAST-P office has been set-up with a dedicated management team.
This will facilitate the deployment of up to $500 million of concessional capital from the Singapore Government into the three FAST-P partnerships, alongside capital from other partners.
He noted that a partnership with British International Investment was just announced.
He said the office will continue to work closely with asset managers, banks, and commercial and concessional investors, to promote innovative blended finance solutions for sustainable infrastructure in the region.
MAS is also working with industry partners through the Transition Credits Coalition (or TRACTION) to develop high integrity transition credits that can accelerate early retirement of coal and its replacement with clean energy.
Building on its interim report which identified key attributes needed to support credible transition, TRACTION will publish its final report at COP30, covering other critical enablers to scale and build confidence in transition credits, said Chia.
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