Enhancing Trust And Security For The Financial Services Industry, Powered By Infocomm

29 June 2006 - Address By Mr. Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore At the VISA Asia Pacific Risk Management Conference.

Address By Mr. Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore At the VISA Asia Pacific Risk Management Conference on 29 June 2006.

Mr. Peter Maher, General Manager, Risk Management, VISA,
Ladies and Gentlemen,

Good morning. It is my pleasure to join you today at VISA's Annual Conference on Risk Management.

Singapore - A Trusted and Vibrant Financial Services Hub

Singapore will be hosting the 2006 Annual Meetings of the Boards of Governors of the International Monetary Fund and the World Bank Group in September. Playing host to a global event of such statue and scale will further enhance Singapore's reputation as a vibrant and trusted financial services hub.

Singapore is today, recognised as a key foreign exchange centre and an important wealth and fund management centre. It has been consistently ranked as the fourth¹ most active foreign exchange trading centre in the world. Singapore is also home to more than 30 of the top 50 US and European fund houses. As at end 2004, funds managed in Singapore totalled US$360.3 billion.

Singapore's reputation as a trusted and vibrant financial hub did not happen by chance. It is a result of the vision of those who dared to dream, and continuously steer Singapore's transformation to tap on emerging global opportunities.

Asia, powered by the growth of China and India, will transform financial markets round the globe - trade and investment patterns will be altered, and new opportunities will surface. To capture these emerging opportunities in Asia, Singapore will need to evolve.

Infocomm Technology Fuels Financial Services Industry

Infocomm Technology will play a key role in shaping the way financial institutions transform their businesses to tap on the emerging opportunities. For instance, financial institutions can now reach out to new markets and extend their distribution of products and services, thanks to Infocomm technology.

However, there are always two sides to a coin. On top of the opportunities that Infocomm technology generates, it has also resulted in a surge in cyber threats. Globally, Governments, businesses and Internet users are faced with the rising trend of cyber threats such as phishing, hacking, virus attacks and spyware.

Singapore's Cyber Defence Efforts

For Singapore to achieve its vision of being an international electronic commerce hub, a conducive legal and policy framework that creates an environment of trust, predictability and certainty in Singapore is vital for electronic commerce to flourish.

To create such an environment, the Computer Misuse Act was enacted in June 1998, which makes a series of computer abuses an offence. Computer abuses range from denial of computer services to unauthorised disclosure of access codes.

In addition, the Electronic Transactions Act was enacted in July 1998 to provide a legal foundation for electronic signatures. This means that contracts formed electronically are recognised in the eyes of the law. Singapore is one of the first countries in the world to enact a law which addresses issues that arise in the context of electronic contracts and digital signatures.

Apart from the regulatory framework, a three-year Infocomm Security Masterplan was unveiled in February 2005. This Masterplan is a national effort by the Singapore Government to protect our critical infrastructure from cyber threats and maintain a secured Infocomm environment for the government, businesses and individuals.

Moving forward, iN2015, Singapore's 10-year IT Masterplan, has outlined key strategies in using Infocomm to secure and promote the growth of online commerce transactions. Let me briefly share with you two key programmes outlined in the iN2015 Masterplan.

Securing Singapore's Financial Infocomm Infrastructure

The first programme involves putting in place a National Trust Framework. The National Trust Framework, or NTF will put in place new initiatives to foster a trusted Infocomm environment, and increase the resiliency of our financial Infocomm infrastructure. This framework involves the development of four key areas, which are Infrastructure, Manpower, Education and Adoption, and Regulation.

Let me first touch on Infrastructure. To develop a Trusted Infrastructure, IDA will look at developing both the "hard" and "soft" infrastructure to help secure, protect and manage users' assets, activities and identities online.

A key initiative under the infrastructure development thrust is the National Authentication Framework (NAF). IDA hopes that the NAF will catalyse the deployment of a nationwide infrastructure for strong, second-factor authentication. This nationwide infrastructure will address the issue of market fragmentation from the deployment of proprietary authentication systems, and provide not only a consistent but an enhanced user experience.

IDA has called for a consultancy study to develop the technical, business, operational and legal frameworks. The consultancy study will be driven in concert with both public and private sector stakeholders, and is expected to commence in August this year.

The second area of the National Trust Framework touches on Manpower development. This is where we focus on building a critical pool of competent Infocomm security (IS) professionals to secure information assets against cyberthreats. This will reinforce Singapore's reputation as a choice-location for hubbing high-end Infocomm-enabled services like security and risk management functions.

A key outcome of this thrust will be the establishment of an association of Infocomm Security Professionals to elevate the professionalism and trust accorded to these professionals.

The third thrust, Education and Adoption, focuses on equipping end-users with the knowledge and tools to protect their computers from cyber threats and privacy infringements. If the nation as a whole becomes more Infocomm security-savvy, it will contribute to Singapore's cyber defence.

The last thrust of the National Trust Framework, which is no less important, centres on Regulation. Some degree of government mandate may be necessary to implement certain cyber security and data privacy measures. Through regulations, necessary measures can be put in place to safeguard and manage users' digital assets and identities.

Some of the areas that may be governed include the collection and usage of online personal data, Infocomm security systems used for businesses and national critical infrastructure; and the National Authentication Framework.

Promote e-Commerce through a Next-Generation Electronic Payment Infrastructure

The second programme involves the development of Singapore's e-payment infrastructure. Today, Singapore is already recognised as an advanced adopter of electronic payment solutions. For instance, in the area of online commerce, Singapore is ranked on par with countries like Hong Kong, Korea and Japan²

A nationwide electronic payment infrastructure that facilitates online payment will serve to lower transaction costs and stimulate GDP growth. According to a VISA study on payment solutions, every 10% increase in the share of electronic payments in the economy will stimulate consumption and GDP growth by as much as 0.5%³.

For Singapore to drive the pervasive adoption of electronic payment, it is critical that the online payment solutions are interoperable, seamlessly connected and secured. Some of you may be aware that IDA and the industry have launched the CEPAS standard just two days ago. CEPAS, which stands for Contactless e-Purse Application, is an interoperable and secured platform for micro-payments. With this nationwide platform, we hope to facilitate seamless and secured payments for both-end users and card issuers like VISA.

Moving forward, IDA will continue to work closely with the industry to facilitate the deployment of innovative, interoperable, and highly secured electronic payment solutions.

Conclusion

I hope I've given you an insight into Singapore's past and current efforts in building a trusted financial Infocomm infrastructure, and our continuing efforts to increase both businesses and users' confidence in online transactions. Singapore's future will become increasingly Infocomm-enabled, particularly with the bold plans of iN2015 to transform lives and businesses with Infocomm. The Singapore Government will continue to adopt a multi-prong approach and work closely with the industry and people to build Singapore into a digital vault for financial services.

On this note, I wish all of you a good day ahead.

Thank you.

Notes:

¹ (The three surveys are "Central Bank Survey of Foreign Exchange and Derivative Market Activity 1998", Bank for International Settlements, 1999; "Triennial Central Bank Survey of Foreign Exchange and Derivative Market Activity 2001", Bank for International Settlements, March 2002; "Triennial Central Bank Survey of Foreign Exchange and Derivative Market Activity 2005", Bank for International Settlements, March 2006.)

² (EIU e-Readiness Ranking, Economic Intelligence Unit,)

³ (Payment Solutions for Modernising Economies, VISA, Sep 2004)