5 key trends in fintech regulation: from robo advisors to bitcoin


As an investor and entrepreneur closely working with governments around the world, LATTICE80 CEO Joe Seunghyun Cho has had his fair share of experience navigating compliance and regulatory frameworks in jurisdictions including South Korea, Hong Kong, and most recently Singapore.

On Wednesday (29 Nov), he spoke at an event on these topics co-hosted by LATTICE80 in partnership with MyRepublic, FireEye, and Straits Interactive. While admitting he is not a compliance and regulatory expert, in the way that a lawyer or specialist consultant in the field might be, he nonetheless wanted to highlight some of the key trends in the regulatory space in Singapore, specifically with regards to fintech.

As the CEO of LATTICE80, a Singapore-based fintech hub, and the Co-founder and Chairman of Marvelstone Group, a private investment firm with asset management licenses, Joe has been a close follower of the evolution of regulations in the city-state spearheaded by the Monetary Authority of Singapore (MAS).

From coding at age 5, to running a hedge fund and fintech hub

“I was lucky to have some exposure to programming when I was five,” Joe said. “I was one of the few kids who got into programming courses in elementary school… When I got into uni, I was naturally interested in programming and had already spent time in high school studying it.”

He also spent about half his time playing video games, he admits. It was a formative time for him. At the tail end of the 90s, the world witnessed the mass adoption of the Internet and email; the much-hyped Y2K fears in 1999 shone a light on issues from cybersecurity to data privacy.

Fast forward to 2017, Facebook and Google have emerged as data masters of the universe. In exchange for providing their services for free, we give them access to our data. They are profiting and innovating, but questions around data privacy, security, and compliance have only continued to grow. And how to regulate it all?

“Compliance is important, but it costs money to implement, so the Singapore government is helping by providing companies funding to do so,” Joe said. “It will only continue to become more and more important, but thanks to new technologies it’s being made affordable and easy; technologies like blockchain.”

5 key trends in fintech regulation

In Singapore, the government introduced legislation called the Personal Data Protection Act (PDPA) in 2012 in attempt to protect consumer data in a brave new world of online business. You can read all about the specifics of the legislation in your own time, but for the sake of this post let’s dive into some top-line takeaways on key areas where regulations are having to keep up with fintech:


  1. Payments: This is one of the most important areas for the Singapore government. Even the Prime Minister took to Twitter to post about the need for an improved, consolidated payments system in the city. The infrastructure is already well developed, but nurturing, well thought-out regulations will be needed in tandem alongside the booming new technology to help speed up innovation.


  1. Cloud computing: Banks are often required to host client data in servers within the market they are serving. However, MAS is progressive and embraces the shift to cloud computing, so long as proper compliance is followed. The obligation remains with the banks and financial institutions to ensure they are compliant as technology evolves.


  1. Financial advisory services: Everyone is talking about robo advisors now. Where banks and financial institutions can’t serve smaller retail customers, robo is emerging as an alternative. Goldman Sachs might not be interested to manage your money if you don’t have millions, but robots don’t discriminate. Again, MAS is keen to allow these innovations to evolve without front-running the technology on the regulatory side.


  1. Regulatory sandboxes: If a technology platform providing a robo advisor wants to manage an individual’s money, for example, traditionally they have required an asset management license, which comes with high barriers to entry. To encourage innovation, however, MAS has created a sandbox environment where companies can test their products in market-like conditions – without having to jump through regulatory hurdles.


  1. Initial coin offerings (ICOs): When Joe asked the audience how many have heard of bitcoin, quite a few hands were raised. However, when he asked how many own bitcoin, only one hand went up. The point is, for most people bitcoin and cryptocurrencies may as well be an exotic foreign country that they have no immediate need, nor desire, to travel to. But for regulators, bitcoin and cryptocurrencies have proven to be one of the biggest challenges in the modern era. In Singapore, MAS is holding back on the temptation to regulate the space per se, which has seen a surge in ICOs this year. That said, some crypto companies still require licenses depending on exactly what they’re offering.


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