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In fresh correspondence with the financial hubs' lawmakers, the Monetary Authority of Singapore (MAS) has continued not to bow to pressure to introduce stricter oversight of buy now, pay later (BNPL) firms, but did suggest that it is looking closely at consumer protection issues elsewhere.
Recently, Singapore’s financial regulator has faced continued scrutiny from parliamentarians about its approach to BNPL, which is being undertaken via guidance it agreed with the country’s fintech trade association.
For example, as covered by Vixio, the government faced a query in March regarding the rising use of BNPL among young consumers, and over breaches of the country’s guidelines for BNPL in February.
Now, it has faced another call, this time from the lawmaker Nadia Ahmad Samdin, who asked “whether the Government assesses a need to introduce stricter advertising guidelines for Buy Now, Pay Later (BNPL) schemes similar to the regulations for advertisement on gambling or high-risk financial products”.
According to the parliamentarian, this was in view of BNPL providers heavily marketing their services on social media and “often using influencers to promote instalment payments on discretionary spending such as fashion, travel, and entertainment to young consumers who may be particularly susceptible to these psychological nudges”.
However, MAS chair and deputy Prime Minister Gan Kim Yong played this issue down, and said that the government does not currently see a need for stricter advertising regulations for BNPL services, especially considering the industry-led code of conduct developed under the MAS’ oversight, which prohibits misleading or exaggerated advertising and requires full disclosure of fees and risks.
Meanwhile, the regulatory official said that the government is taking a closer look at the role of financial influencers, otherwise known as "finfluencers", in light of a recent incident involving a platform that suspended instant withdrawals following a surge in user activity.
Parliamentarian He Ting Ru raised concerns over non-licensed individuals influencing public opinions on licensed financial institutions, and in response, minister Alvin Tan said the MAS had received eight complaints about finfluencers so far this year, already exceeding the five-year annual average.
While some finfluencers promote financial literacy, the MAS is closely watching whether their content veers into regulated financial advice, which is prohibited without a licence.
Finfluencers paid to recommend or even regularly express views on investment products may be deemed to be providing financial advice and could face regulatory action.
Indeed, even unpaid influencers making misleading statements may run afoul of the Securities and Futures Act, Tan warned.
