Additional funding targets quantum computing, post-quantum cryptography, and AI-driven risk models in Singapore's financial sector.

The Monetary Authority of Singapore (MAS) announced on 18 July 2024 an additional S$100 million commitment under the Financial Sector Technology and Innovation Grant Scheme (FSTI 3.0) to co-fund quantum-safe cybersecurity and AI-driven risk models, positioning Singapore's financial sector for next-generation technological risks. The funding, which supplements the S$150 million originally committed under FSTI 3.0 in 2022, targets two rapidly advancing fields—quantum technologies and artificial intelligence—that the regulator identifies as having transformative potential for the financial industry and broader economy.

The S$100m Commitment: Quantum and AI

MAS disclosed the additional S$100 million allocation in a media release on 18 July 2024, stating that the funds would support financial institutions in building capabilities in quantum and AI technologies, as well as enable innovation and adoption in financial services. The commitment sits within FSTI 3.0, which was announced by then Deputy Prime Minister Lawrence Wong at the Singapore FinTech Festival in 2022 and originally comprised six tracks: Centre of Excellence (COE), Industry-Wide Projects, Innovation Acceleration, AI and Data (AIDA), RegTech, and ESG FinTech. With the new injection, total MAS funding under FSTI 3.0 now stands at S$250 million.

The regulator emphasised that quantum computing is a "rapidly advancing field" that could transform the financial industry, while concurrently noting the urgency of preparing for post-quantum cybersecurity threats. The S$100 million is structured around two core pillars: a dedicated Quantum Track introduced under FSTI 3.0, and enhancements to the existing AI and data grant scheme.

Quantum Track Grant Structure

MAS established the Quantum Track under FSTI 3.0 to support financial institutions in building quantum capabilities in Singapore, building on collaboration with the National Quantum Office following the May 2024 announcement of Singapore's National Quantum Strategy. The track comprises three distinct grants:

• Technology Centres grant: Provides up to 50% co-funding on manpower and qualifying expenses—including hardware and software infrastructure, subscriptions, and licenses—for a period of 24 months. This grant supports the establishment of quantum computing and security innovation functions in Singapore, enabling financial institutions and global technology companies to explore quantum technologies.

• Technology Innovation grant: Offers up to 50% co-funding across two sub-tracks: one supporting institutional use cases for quantum solutions, and another designed to address industry-wide problems.

• Security grant: Provides funding support of up to 30% to enable experimentation and development of quantum technology-related pilots that explore Post-quantum Cryptography (PQC) and Quantum Key Distribution (QKD) to safeguard firms' critical data.

Co-Funding Rate (%)Source: Orionmano Industries

The differential co-funding rates reflect a deliberate calibration: the Technology Centres and Technology Innovation grants, both capped at 50%, incentivise infrastructure build-out and applied research, while the Security grant's lower 30% rate likely reflects the more nascent and experimental nature of PQC and QKD deployment in financial contexts.

Strengthening AI Adoption

Separately, MAS announced enhancements to the existing AI and data grant scheme under FSTI 3.0, which previously supported the AIDA track. The enhanced scheme is designed to help financial institutions establish 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, and testing and monitoring.

The regulator did not separately disclose specific co-funding rates for the enhanced AI grants in the 18 July 2024 announcement, nor did it break out the allocation of the S$100 million between quantum and AI components. Industry observers note that the AI enhancements build on Singapore's broader national AI strategy, which has seen MAS support projects involving real-time fraud detection, credit risk modelling, and compliance monitoring using machine learning techniques.

The deployment of these funds over the next two years will likely accelerate the testing of quantum-safe cryptography and AI risk models, potentially setting regional benchmarks for financial sector resilience. Financial institutions operating in Singapore—a jurisdiction that hosts more than 200 banks and serves as a regional hub for wealth management and trade finance—will be under pressure to adopt these technologies ahead of competitors in less-supported jurisdictions.

Talent Development and Ecosystem

MAS announced that it will work with Institutes of Higher Learning (IHLs) and the Institute of Banking and Finance (IBF) on talent development initiatives to build quantum capabilities in the financial services sector. This component addresses a critical bottleneck: the global shortage of professionals with dual expertise in quantum computing and financial services.

The talent initiatives complement the grant structure by aiming to create a pipeline of quantum-literate financial technologists. MAS has previously collaborated with the National Quantum Office and IHLs on quantum research and education, and the FSTI 3.0 quantum track extends this collaboration into applied financial use cases. The involvement of IBF suggests that the regulator expects these initiatives to lead to formal certification or accredited training pathways for financial sector professionals.

The deployment of these funds over the next two years will likely accelerate the testing of quantum-safe cryptography and AI risk models, potentially setting regional benchmarks for financial sector resilience. Singapore's approach—combining co-funding grants for infrastructure and pilot projects with parallel talent development—offers a model that other financial hubs in Asia-Pacific may study as they confront similar technological discontinuities.