Catalysing new business opportunities with emerging technologies

While many investment companies adopt a wait-and-see approach towards emerging technologies, Temasek is boldly harnessing the power of artificial intelligence (AI) and blockchain to pioneer innovative solutions that can catalyse new business opportunities. 

“Of our financial services portfolio, which makes up 21 per cent of our overall portfolio (as of Mar 31, 2023), fintech is an important component,” said Mr Sng Ren Yeong, managing director for AI strategy and solutions at Temasek. “It is an integral aspect of our global strategy aimed at increasing our exposure to non-bank financial services, including insurance and payments.”

Mr Sng added that Temasek recognises the imperative of embracing new sectors and emerging technologies to assess their potential impact on its existing portfolio. To mitigate risk, it caps investments in early-stage companies at 6 per cent of its portfolio, diversified across multiple regions and sectors. 

The impetus to strengthen the resilience of its portfolio was also what led to the creation of Temasek’s AI and blockchain teams in 2018. “Given how nascent the space was at that time, many of the ideas or solutions we were seeking were either very new or entirely non-existent. This gap prompted us to create the solutions ourselves, both independently and with like-minded partners that share a similar vision,” said Mr Sng.

DRIVING INNOVATIONS IN BLOCKCHAIN 

Foundational technologies such as blockchain and AI are crucial for driving fintech’s transformation and setting new standards for innovation and efficiency. 

Temasek’s blockchain team tracks the evolution of financial market systems to identify avenues for development and innovation, including programmable money applications. 

The company’s platform, Partior, leverages distributed ledger technology (DLT) to create a global unified ledger for the seamless clearance of cross-border payments and securities settlements, with programmability, immutability and traceability built into its suite of services. Together with shareholders like DBS Bank, JP Morgan and Standard Chartered, Partior is well-positioned to drive change in the sector, said Mr Sng. 

Along with Partior, Temasek introduced Marketnode, a joint venture with SGX Group focusing on modernising capital markets infrastructure and tokenising traditional financial assets. Last year, Marketnode unveiled Fundnode, an industry-wide investment funds utility that harnesses DLT to optimise funds settlement and processes. It also participated in Project Guardian, an initiative on asset tokenisation led by the Monetary Authority of Singapore, and successfully executed a technical pilot with HSBC and UOB in June. 

ELEVATING AI CAPABILITIES

Temasek’s AI strategy centres on building capabilities. According to Mr Sng, rapid advances in AI will enable financial services firms to create smarter and more efficient systems, in turn enhancing customer experiences. 

Temasek’s technology venture, minden.ai, has already yielded impressive results. Established in collaboration with strategic partner DFI Retail Group, as well as DBS Bank, minden.ai uses AI and machine learning to enhance the engagement between brands and consumers. Its flagship digital consumer loyalty coalition programme yuu Rewards Club, launched last year, streamlines the points-earning and rewards experience for users across participating brands such as Cold Storage, foodpanda, Giant, Gojek, Great Eastern, Guardian, PAssion, Singtel and BreadTalk. In just one year, yuu has onboarded over 1.4 million members. 

Apart from minden.ai, Temasek has established Aicadium, a global technology company that aims to scale AI deployment and operationalise solutions across Temasek’s portfolio companies.

NAVIGATING THE NEXT FRONTIER

As AI, particularly generative AI, becomes increasingly prevalent, policies surrounding governance and regulation must keep pace.

To this end, Temasek is supporting Singapore’s AI Verify Foundation, which brings together AI owners, solutions providers, users and policymakers in an open-source community to develop AI testing tools that promote responsible use.

In a rapidly changing job landscape, Temasek will also need to be ready for a new era, “with AI acting as intelligent co-pilots to humans”. Said Mr Sng: “Preparing our portfolio companies to be future-ready is critical to their success, our long-term returns and Singapore’s economy. With the progressive adoption of AI, we can enhance organisational design, invest in skills upgrading to boost productivity and create better opportunities for the workforce.”

To facilitate these developments, Temasek hosts the annual Temasek Tripartite Conversations, which gathers government agencies, trade unions and its portfolio companies to identify upskilling and reskilling opportunities for Singapore’s workforce in a dynamic and complex world. 

“As an investment firm, we must anticipate immediate and future challenges and opportunities. This is crucial for understanding how emerging sectors and technologies can drive future value in an ever-changing world,” said Mr Sng. 

Find out how you can build future-ready capabilities to foster growth with Temasek.

Learn more about the future of finance at the Singapore FinTech Festival from Nov 15 to 17, 2023.