SPEECH BY MR CHAN CHUN SING, MINISTER FOR TRADE AND INDSUTRY, AT INSTITUTE OF BANKING AND FINANCE SINGAPORE’S DISTINCTION EVENING ON THURSDAY, 4 OCTOBER 2018 AT 7.30PM AT RITZ-CARLTON, MILLENIA SINGAPORE

1. A very good evening to everyone. Let me first congratulate all the award winners tonight. I congratulate you not just because you have done well for yourself, but you have done well for the industry. You have done well for the industry not just because you have improved the topline for your respective businesses, but more importantly, you have brought the workers along especially in times of great disruption.  
2. I would also like to thank the Institute of Banking and Finance (IBF) for all the work that you have done to help the workers transit in a time of emerging technologies. I knew of the work of IBF when I was in the National Trades Union Congress (NTUC), working with Patrick Tay, to see how we can help our workers facing great disruption to not only stay in this industry, but to thrive. So today, your very presence here is testimony to the good work that you have done for yourself, for your company, and most importantly for Singapore, so thank you very much. Having said that, tonight we are gathered in an interesting time asthe kind of challenges that we are facing are quite unprecedented in recent history.  
3. For Singapore, we have our evergreen challenges. How do we grow an economy that is not dependent on size or geography? Our challenge since 1965 has been this – how do we create good jobs for our people, that we do not have to compete on the basis of size or price. We make a commitment to ourselves that each and every Singaporean worker will have a better future. But beyond that baseline challenge of not being circumscribed by our size or geography, we now have two new sets of challenges that we are facing in this world economy.  
4. First, as Ravi Menon rightly mentioned, we are facing unprecedented disruption from technological change. Not just in terms of the scale, but more importantly in terms of the speed of disruption. And the financial industry is at the forefront of this disruption. If you manage this well, it will create opportunities for us to use technologies to transcend geography and size, and create even better opportunities for people going forward. But on the other hand, if we do not prepare our workforce well, then the very same technology could be the same reason for the displacement of our workers in the same industry, particularly for the finance industry. 
5. The second challenge that we are facing now is the movement towards protectionism. I would say that we have not witnessed the same mood of protectionism since the 1930s - the Great Depression. Over the last 100 years, we have over different periods of time, experienced different parts of protectionism and isolationism. In the 1930s, there was a sense that because of the grave disruption, we would need to close our borders and protect our people.  
6. In the 1960s, we once again had the debate about import substitution versus export orientation. The current mood that we are seeing today is not entirely new, because when there is great disruption and Governments are unable to help the people adjust, unable to help redistribute some of the gains from globalisation, there will be a local effect with global consequences. This is what we have witnessed in the United States, in Europe and many other countries. So we cannot kid ourselves that all these disruptions will not impact the Singapore economy or the Singapore workforce. Take the US-China trade tensions for example. It will lead to shifts in the global production chain and the global value chain. So, the question for Singapore is how do we address such challenges? We are concerned at two levels.  
7. In the immediate to medium term, we are concerned about how these shifts will create both opportunities and challenges for different sectors. It is not a given that it will be a nett plus or nett negative. In the short to medium term, we have already seen companies making adjustments to de-risk their portfolio, to spread out their production, so that that are not held ransom to the waverings of politics.  
8. But this is just the short to medium term perspective. What we are more concerned with is a potential loss of global confidence in investment and financial markets. Many of you will be very familiar with analysts’ prediction that we are headed towards a correction in the next few years. If this correction coincides with a global loss of confidence due to a trade war, there will be severe implications for all economies in the world, particularly for countries like Singapore that are highly dependent on trade and access to external markets. So, we need to watch the situation carefully. But having said that, there are also opportunities that we can seize in this time of disruption. 
9. Let me speak a bit about how we compete as an economy using the acronym SMART. I will start backwards from T. Technology is a double-edged sword. If we seize opportunities well, the technologies that are disrupting the markets are also the same technologies that will allow us to disrupt our competitors. Take the fintech sector for example. We pay a lot of attention to the fintech sector because it is a sector that does not depend on the size of our geography or the size of our workforce or the size of our land. If you master that well, there is no reason for us to think that it cannot be a key engine of Singapore’s continuing success and growth, that this sector will be the one that will more often than not, outstrip the average economic growth of other sectors.  
10. But acquiring these new technologies will require us to build globally competitive technological teams, to build a workforce that is technologically savvy. In today’s intense competition in the fintech industry, everyone will gladly admit that do not have all the manpower resources and talent, and everyone will also agree that we need to build competitive teams to serve the global markets. It is no longer useful to talk about the financial industry in a particular geography. The financial industry is global. We need globally talented teams. And many have told us that the window is closing. We need to double our efforts to develop our workers and to attract the global talent and work with Team Singapore to compete in the global arena. So, technology to us, is not a threat per se. It is an opportunity for us to transcend our size and geography. 
11. Next, I will touch on regulations. Singapore starts from a high base because of our high standards of living. But competitive regulation is a competitive advantage that we need to continuously strengthen. Some have told us that regulatory agility is an oxymoron, but as they say the genius is the one who holds two competing concepts in the mind at the same time. If we do not evolve our rules and regulations fast enough, we will be left behind. But as we evolve our rules and regulations, we must also maintain and strengthen the brand of trust that others have come to expect from Singapore. And in this, I am very happy to see the efforts by the Monetary Authority of Singapore (MAS) using tools like regulatory sandboxes, to test new ideas to see how we can always be at the cutting edge of new regulations. So, new regulations enable innovation and not just prevent bad things from happening. This is how we use regulation as a competitive advantage. There are many more things for the industry to do so that regulations can be used as a competitive advantage.  
12. A – access to markets. This is under stress as we speak because of the type of protectionism, the type of isolationist tendencies. But Singapore must continue to work with like-minded countries to continue to uphold, defend and evolve the local trading system that is open, rules-based. Uphold and defend are understandable, but I also say ‘evolve’. Evolve because we recognise that the World Trade Organisation (WTO) system is not perfect. The WTO system will constantly need to evolve to meet the challenges of the new era. Take the financial industry’s challenges as an example. How do we regulate the new financial products, the new financial flows, the new data flows? We need new rules to govern the new economy and the new global trading system. Data is not subtractive, if anything it is additive. The more we allow data to flow, to be exchanged, to be processed, to be analysed, the greater value that we can all enjoy. But it in this new process, we also need new rules to talk about how the benefits in the entire data chain can be accrued to different parties. So, this is just one simple example of how we need to evolve the rules and regulations and work with like like-minded parties to build an even stronger, more inclusive WTO system for ourselves and the rest of the world. 
13. Now I will touch on M - our market knowledge. Singapore aspires to be the global Asia node. For us to develop the industry and workforce, we need in-depth market knowledge of our region as Asia Pacific, Southeast Asia. We cannot compete on the basis that we know things in general only. We need to have deep knowledge. Many people say that a lot of the financial flows do not come to Singapore; they come through Singapore, and we need to have a good reason why they come through Singapore.
14. . One of the reasons that they come through Singapore is because of the strength of our regulations. But another reason that they come through Singapore is because we have the industry knowledge, the deep market knowledge within our economy, within our financial system for us to value-add to all others who want to bring their money through Singapore. As generations of people get comfortable settling in Singapore, we will constantly have to guard against complacency where our people do not venture forth and understand the market in the region. Market knowledge will be key to our competitive advantage. 
15. Last but not least, S – services. Only when they have deep market knowledge, can we as an industry continue to be involved in new services. Only then can we produce new services that suit the needs of the new generation and continue to do well with the current suite of services that it necessary but never sufficient. And this is why I am so pleased to see IBF partnering government agencies, companies, and inpiduals to constantly challenge ourselves to see how we can use new technologies, to create new products and services for our industry. So new technologies, access to markets, market knowledge of the region and constantly challenging ourselves to generate new products and services will be how we need to compete as an industry.  
16. Having come from NTUC, I will say that the workers in the are willing to make the necessary adjustments if they know where the industry is going. The government will continue to match the resources of companies and efforts of our people. We will continue to partner companies, banks, financial institutions and our workers in this journey where they face great challenges and great opportunities.  
17. But companies must also take leadership; workers must take ownership. This is why I am so proud to hear of the stories of how our local financial industries have helped our workers to adjust. These are not stories told to me by CEOs; these are stories that I have gotten out of workers themselves. I will just share two.  
18. Some time ago, when I went into a local bank branch, there were no conventional bank tellers. Instead a middle-aged lady offered her assistance. She explained that I would need to wait and asked if she could interest me in some financial products in the meantime. I was quite intrigued so I asked her what she was doing before this job. She explained that she used to be a bank teller in the same bank for over 20 years. She explained that she was no longer a bank teller as machines could do that job better.  
19. Eventually, she asked me for some personal particulars and recommended some financial products to me. Was she necessary in the whole process? If you think about it, today, we can buy many financial products off the internet, including insurance, wealth planning products. But why is the human still necessary?  
20. That’s because ultimately, purchasing banking and relations, financial sector products, depends on trust. We can all buy things on the internet for simple products, and we should. But when it comes to wealth management, sophisticated financial products, we are still humans. We want to hear from another human being and see whether we can trust that person to represent that company, that financial institution.  
21. So, what does a SMART worker in the financial industry have? The brand of trust. This is something we must maintain and jealously guard to protect and uphold that brand of trust we have in this industry, starting with our workers.  
22. That worker also displayed another characteristic of the SMART worker, that is being resilient. She said that she had to try multiple times to learn these new skills, and that speaks of her resilience. This is not to make light of the challenges that many will face when they are in their forties and fifties. We in the management must continue to encourage them. With the aid of technology, we enable our workers to do better. Not to displace our workers, but to complement our workers.  
23. This worker was also agile. She was prepared that her job as a bank teller would no longer exist. She was agile not just in her skillsets, but most importantly in her mindset. She was also motivated. She was motivated to stay in the industry. She did not choose the easy way out but instead she took the tougher path and today she has a brighter future. The SMART worker upskilled herself. She was agile, resilient and most importantly, she upholds the brand of trust.  
24. Let me end with a second story. I have visited quite a number of banks and they all have great visions. However, there was one particular bank that I visited and walked out believing them.  
25. As usual, the senior management gave a nice presentation, but the skeptic in me led me to randomly speak to a few staff. I asked if they knew what their bank was going to do in the next 12 months. They knew. I then asked if they knew if the bank was making or losing money. They also knew the right answer. I was still not satisfied. I asked a worker if the bank had any plans for her now that her job was going to be gone. The worker was not at all perturbed or fazed. She acknowledged that her job would be gone, but told me that the bank had promised her that they would be sent for training in the next six months and her union would be responsible for her training and after that, she would be deployed in the same bank.  
26. I tell this story because after all is said and done, it is the workers that are at the heart of the industry. And if workers are at the heart of all that we do for the industry and for Singaporeans, then we must make sure that in such moments of great disruption, we take care of each and every one of them. Why was that particular bank so impressive? Because they had a system - every month, the unions would meet the management. This was to help the workers understand the challenges facing the bank, the disruptions caused by technology, and the game plan that they had to work out together with the union for each and every one of them. Because of such efforts, I went away very confident that that bank would be able to ride the waves of change, to not only create new businesses for itself, but more importantly to create new and better jobs for its workers.  
27. I am happy to say that that bank in Singapore was not an isolated case. I know many of you are doing similar things to help bring the industry to the next higher plane and to help the workers to not only survive the disruption, but to thrive. On that note, I would like to thank you all for your tremendous effort as a part of IBF to help uplift the industry. Thank you very much.