MAS commits SGD100m more to support AI and quantum tech in Singapore financial sector

The Monetary Authority of Singapore (MAS) has announced that it will commit an additional SGD 100 million under the Financial Sector Technology and Innovation Grant Scheme (FSTI 3.0).

This additional funding will support financial institutions in building capabilities in quantum and Artificial Intelligence (AI) technologies. It will also enable the advancement of quantum- and AI-related innovation and adoption in financial services.

Quantum capabilities in the financial industry

Quantum technology is a rapidly advancing field that holds significant potential to transform the financial industry and broader economy.

MAS has been collaborating with the National Quantum Office, following the announcement of the National Quantum Strategy by Deputy Prime Minister Heng Swee Keat in May 2024.

The Authority will establish a Quantum track under FSTI 3.0 to support financial institutions’ interests to build quantum capabilities in Singapore. The Quantum track will comprise the following grants:

● Technology Centres grant: This supports the establishment of quantum computing and security innovation functions in Singapore, to enable financial institutions and global technology companies to explore and unlock new opportunities arising from quantum technologies.

This grant will provide funding support of up to 50 per cent on manpower and other qualifying expenses such as hard/software infrastructure, subscriptions and licenses, for a period of 24 months.

● Technology Innovation grant: This comprises two sub-tracks to support adoption of quantum technology solutions by financial institutions. The first sub-track aims to catalyse meaningful institutional use cases that bring about significant impact to business. The second sub-track will support strategic endeavours to solve relevant industry-wide problem statements.

Up to 50 per cent co-funding support will be provided to advance the exploration and implementation of such quantum solutions.

● Security grant: This aims to enhance cyber-security readiness to better prepare Singapore’s financial infrastructure and services for the quantum era.

Funding support of up to 30 per cent will be provided to enable experimentation and development of quantum technology-related pilots that explore the use of Post-quantum Cryptography (PQC) and Quantum Key Distribution (QKD) to safeguard firms’ critical data.

PQC is the design and implementation of protocols that are believed to be secure against the added computational capabilities of quantum computers. QKD is a secure communication method for exchanging encryption keys only known between shared parties.

Adoption of AI in the financial industry

While financial institutions have been progressively adopting AI, recent technological advancements have made such tools more widely accessible and increased the pace of adoption.

With the advent of Generative AI, financial institutions have embarked on initiatives to map the technology’s opportunities and risks, and have begun piloting it across a range of use cases. Nevertheless, the level of AI-readiness and adoption varies across financial institutions in Singapore.

MAS will enhance the existing AI and data grant scheme under FSTI 3.0. This will achieve the following:

● Bolster financial institutions’ development and deployment of AI technologies in Singapore: Singapore has the potential to become a centre of excellence for anchoring AI capabilities, such as in the development of applications, as well as testing and deployment of AI solutions for the financial sector.

MAS will support financial institutions in establishing AI innovation centres in Singapore for a range of functions, including AI model building and training; deployment of AI models for high-impact use cases; governance and risk management; as well as testing and monitoring.

● Develop AI platforms to address industry-wide use cases: There are strong prospects for the financial industry to apply AI to solve industry-wide problems beyond what each financial institution can do individually.

This involves the development of frameworks and platforms for policies and protocols that enable secure and privacy-protected data exchange where financial institutions can collaborate on industry-wide use cases.

MAS has identified scam and fraud detection as a use case for the first pilot project, and will work with banks, technology solution providers and public agencies on this.

The funding will support projects that accelerate the development of industry-wide AI solutions and high-impact use cases. More details on the enhanced support for AI will be announced in the coming months.

FSTI development timeline

The Financial Sector Technology and Innovation Grant Scheme was introduced by MAS in June 2015; it was designed to support the creation of a vibrant ecosystem for innovation in the Singapore financial sector.

FSTI 3.0 was announced by then Deputy Prime Minister (and now Prime Minister) Lawrence Wong, at the Singapore FinTech Festival in 2022.

It seeks to accelerate and strengthen innovation by supporting projects that involve the use of cutting-edge technologies or with a regional nexus.

The scheme currently consists of six tracks: Centre of Excellence (COE); Industry-Wide Projects; Innovation Acceleration; AIDA; RegTech; and ESG FinTech. SGD 150 million was committed under FSTI 3.0.