The Prime Minister of Singapore has urged the country’s banks and regulators to keep up to scratch with technological developments such as blockchain technology.

Speaking at the United Overseas Bank 80th anniversary dinner held in Singapore yesterday, Prime Minister Lee noted the challenges currently facing the financial industry and highlighted the importance of keeping abreast with technological developments in order to remain competitive.

He said:

“Looking ahead, the banking industry is entering a new challenge … The operating environment has become more challenging, but on top of that, technology is moving very fast with new business models disrupting traditional banking. For example, more and more people are making payments through their smartphones.”

“… There are other technologies, like blockchains, which is used for bitcoin, but can also be used for many other applications like real-time gross settlement, or trade finance verification. So our banks and our regulators must keep up to date and up to scratch with these developments,” continued the Prime Minister.

Despite the current challenges facing the industry, the Prime Minister noted that the banks were in a strong position but advised them not to become complacent and to continue monitoring opportunities.

“We are in the heart of rising Asia,” he said, adding “the banks have strong balance sheets and with a strong regional presence, they can take advantage of many opportunities around them but at the same time they have to know that this is a very competitive business that continues to evolve rapidly and so they have to keep upgrading their technologies, services and business models”.

Although he largely praised the country’s banking industry, the Prime Minister singled out some banks abroad, branding their digital banking models as “outstanding”.