MAS Chief Warns of Tariff Uncertainty, Urges Resilience as Singapore Navigates Inflation, AI Risks, & Scam Surge

Key Takeaways

• Tariff Uncertainty and Supply Chain Risks: MAS expects subdued global growth in H2 2025 as tariff impacts and trade policy uncertainty weigh on consumption, investment, and supply chains.
• Stress Testing and Financial Resilience: Singapore’s financial system remains robust, with strong capital buffers in banks and a resilient household sector, but smaller firms and vulnerable households are urged to brace for economic shocks.
• AI Risk and Governance in Finance: MAS is developing supervisory guidelines and an AI governance handbook to manage model, data, and third-party risks in financial institutions.
• Digital Resilience and Scam Safeguards: MAS is prioritizing payment system resilience, quantum-safe encryption trials, and stronger consumer safeguards as scam typologies evolve.
• Sustainable Finance Growth: MAS is deepening Singapore’s leadership in transition finance, including through the FAST-P platform and expanded use of the Singapore-Asia Taxonomy.

Deep Dive

Unveiling The Monetary Authority of Singapore's (MAS) Annual Report for Financial Year 2024/2025, Managing Director Chia Der Jiun struck a confident tone in the strength of Singapore’s financial system, but clear-eyed about the geopolitical, technological, and economic risks that could reshape the landscape in the years ahead.

The report, which includes the central bank’s financial statements and a message from Chairman Gan Kim Yong, outlines MAS’s achievements over the past year, but Chia’s remarks at the media conference made clear that MAS is already looking ahead.

For much of early 2025, the global economy seemed to be on relatively steady footing. But that’s changing fast. April’s tariff announcements have complicated the outlook, injecting both inflationary and disinflationary forces into the mix and introducing fresh uncertainty to global trade.

Businesses scrambled to front-load orders ahead of tariff deadlines, boosting short-term activity but that’s not a sustainable trend. “Front-loading will not continue indefinitely,” Chia noted. With consumption and investment expected to slow in the months ahead, MAS is projecting subdued global growth in the second half of the year.

Singapore’s economy has so far held up better than expected. Q2 GDP grew 4.3% year-on-year, buoyed by exports and deferred tariff impacts. But that strength is unlikely to last. “Overall, growth will likely soften,” said Chia, aligning with a broader trend of waning business sentiment and fragile global demand.

Resilience, But Not Complacency

Markets, however, seem oddly upbeat. Equities have rallied, volatility is low, and credit spreads remain tight. That disconnect between risk and reality is worrying to MAS, which sees the potential for sharp corrections if trade or geopolitical tensions escalate.

Still, the good news is that Singapore’s financial institutions are well-positioned. MAS ran a severe stress test scenario this year, layering on trade shocks, policy volatility, and tightening global conditions. The results were reassuring that if banks have strong capital buffers, households remain broadly resilient, and liquidity across markets is healthy.

But Chia flagged pockets of vulnerability. Smaller, trade-dependent firms are at risk of revenue drops and liquidity crunches. These businesses, he urged, should act early by building buffers, diversify income streams, and tap into government support like the new Business Adaptation Grant.

Households with less stable incomes also face exposure, particularly if the economy slows further. The message is to stay prudent, avoid over-leveraging, and prepare for possible shocks.

Artificial Intelligence, Real Responsibility

One area where MAS is taking an especially forward-looking stance is artificial intelligence. With over 30 financial institutions now building AI capabilities in Singapore (some as global hubs) AI is rapidly becoming a competitive differentiator in the financial sector.

But it’s not without risk. From poor model governance to data bias and opaque algorithms, MAS sees clear dangers if institutions scale up AI without robust controls. To that end, MAS is drafting supervisory guidelines on AI risk management, due for consultation later this year. These will focus on evaluating model risk, testing explainability, and managing third-party providers.

The regulator is also partnering with the industry-led MindForge consortium to develop an AI governance handbook to complement the new guidelines, offering practical, use-case-driven insights for financial institutions trying to adopt AI safely and responsibly. Alongside this, MAS has launched PathFin.ai, a peer learning initiative helping firms earlier in their AI journey learn from those with more mature deployments. And in partnership with the Institute of Banking and Finance, MAS is piloting AI workforce transformation programs aimed at re-skilling existing talent for the GenAI age.

Digital Trust Under Pressure

As digital services become ever more embedded in daily life, their resilience, and the public’s confidence in their safety and protection of personal data, has become mission-critical. Chia stressed that even brief service outages in retail payments now carry reputational risks and erode trust.

That’s why MAS is working closely with banks and NETS Group to launch “stand-in” capabilities that keep contactless payments running even if a bank’s systems go down. The next step is to do the same for QR code payments.

MAS is also preparing for a threat that feels like science fiction but is becoming very real in quantum-powered decryption. The agency completed trials this year on Quantum Key Distribution (QKD), partnering with banks and tech providers to test secure communications. A technical report is forthcoming and MAS is now encouraging banks to start mapping their transition to quantum-safe encryption.

Scams, Surveillance, and the Tradeoff Between Speed and Safety

If there was one theme that ran throughout Chia’s remarks, it was trust and nowhere is that more under threat than in the fight against scams.

Despite progress, scams, especially those involving victims authorizing transfers themselves, remain a major problem. MAS is pushing banks to raise the bar on authentication and friction points.

Some of the measures already in place:

• Phasing out SMS OTPs for digital banking
• Rolling out Money Lock, which now protects S$28 billion in customer funds
• Real-time fraud surveillance and cooling-off periods under the new Shared Responsibility Framework
• Upcoming support for FIDO-compliant hardware tokens that add a physical barrier to remote fraud

Chia acknowledged the tension between convenience and control. “These safeguards will introduce more friction,” he said, “but as a society, we will have to choose: more security, or more convenience.”

Green Finance on a Steady Path

While the global sustainability agenda faces headwinds, MAS continues to chart a steady course. Singapore led the region in green and sustainability-linked lending last year, with S$48 billion originated in 2024 alone.

Chia shared updates on three major sustainable finance initiatives:

• The Singapore-Asia Taxonomy, which is gaining traction across banks and aligning with EU and China frameworks
• The FAST-P platform, now mobilizing up to US$500 million in concessional capital for Asia’s transition projects
• The TRACTION initiative, which is developing credible carbon transition credits ahead of COP30

Singapore is doubling down on its role as a hub for credible, regionally relevant green finance and MAS is working hard to ensure definitions, disclosures, and governance are fit for purpose.

If the MAS Annual Report reflects the year that was though, Chia’s remarks were about a world where resilience isn’t just about capital buffers, but about operational readiness, AI governance, scam defenses, compliance, and the ability to navigate geopolitical fragmentation.

In short, the future belongs to those who can adapt and those who can be trusted.

“MAS’s role,” Chia concluded, “is to provide that anchor of stability in uncertain times. But resilience will have to be built by all of us—businesses, institutions, and consumers alike.”

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