Goh Chok Tong said last night.
He also announced that Singapore's first certification authority for
Internet commerce -- Netrust -- had been formed. It would issue electronic
identification certificates to individuals and organisations to facilitate
communication and commerce over the Internet.
"Such certificates will serve as
the equivalent of one's signature or thumbprint in cyberspace," he explained
in his speech at the 25th anniversary dinner of POSBank.
He pointed out that security of
the transactions is a major challenge facing electronic commerce, which refers
to the paperless method of undertaking commercial transactions over computer
networks. "A pre-requisite for secure electronic commerce is the ability to
establish the identity of the parties you are transacting or communicating with
over the Internet," he said.
The establishment of Netrust would
"foster confidence in electronic commerce as participants can be assured of
the identities of their counterparties over the Internet."
Netrust is a joint venture between the National Computer Board and the Network
for Electronic Transfers (Nets), which is jointly owned by POSBank and the six
local banks: DBS Bank, United Overseas Bank, Overseas Union Bank, OCBC Bank,
Keppel Bank and Tat Lee Bank.
Initially, Netrust would be able
to help both individuals and organisations located in Singapore to identify
each other electronically, he said. In future, it would be connected to certification
authorities overseas. "In order to give electronic transactions the full benefit
of the law, the Government would be introducing legislation to support digital
signatures and digital transactions," said Mr Goh.
"Such legal frameworks would provide
the business community greater certainty in conducting electronic commerce and
help foster its development," he added.
Bankers said the onset of full-fledged
electronic commerce had been dogged by fears of fraud in recent years. As a
result, many firms, like Netscape, Visa and Mastercard, had been rushing to
set up a secure method to facilitate electronic transactions. PM Goh: Keep an
eye on costs
On another front, Mr Goh said Singapore's
financial sector needed to keep an eagle eye on costs so it could retain its
role as the major financial centre for the region.
"We cannot expect to compete with
other better endowed countries in terms of cost per se," he said. "But we can
avoid pricing ourselves out of the competition."
Higher operating costs could be
offset with more efficient and reliable infrastructure, and better working and
living conditions. In addition, investor confidence would also be maintained
by sound economic and fiscal policies, financial regulation, as well as supportive
trade unions.
"We have to offer financial institutions
and investors a better all round package so that they can get much more value
for their investments in Singapore, despite our higher operating costs," he
said.
Liberalising financial markets
in the region and intensified competition would also result in yet greater competition
here, he said.
The World Trade Organisation, for
example, was working on a package to liberalise the financial services sector
by the end of this year, he said. Asean, the regional grouping of South-east
Asian countries, was moving towards a free trade area in services, an aim which
would include financial services.
Hence, banks in Singapore should
continue to prepare for yet more competition on the local scene, and explore
non-traditional activities like investment banking, Mr Goh said.
They should also establish wider
networks in the region and forge strategic alliances with regional partners,
he added.