The next stop for  ‘smart’ Singapore? Cognitive city

By deepening the development of smart banks and becoming the crossroads of cognitive urban expertise, Singapore can become the archetypal city of the fourth industrial revolution. 
So, what is a cognitive city?
A cognitive city differs from its conventional and smart counterparts in the fact that it is steadily “learning” through constant interaction with its citizens via advanced information and communications technologies.
While information in smart cities flows mainly one way, in cognitive cities a two-way process allows urban development to constantly adapt to human needs. 
A city can then proactively provide services to the public, often independent of the human decision-making process.
From the public point of view, a cognitive city turns residents from passive recipients to active agents in making their urban environment, tapping their wisdom fully. Their visions and suggestions can be realised, for example, via their feedback on areas such as traffic networks and energy use.
A cognitive Singapore would become the model for the next phase of global urban development. 
Key to that leap is developing Singapore’s smart banks, particularly through mobile payment. China is a leader here, having developed a highly sophisticated system of mobile payment where any individual in nearly 280 cities needs only to carry a smartphone and not cash for daily needs, transportation and touristic activities. In fact, some 30 countries have extended that service to Chinese tourists, integrating China’s mobile payment system into their own infrastructure.
Chinese mobile payments were worth around $9 trillion in 2016 – 80 times larger than the United States where the market size was $112 billion. This shows the depth and steep rise of the Chinese system, which is already impacting the global economy as well as financial businesses.
In August, Prime Minister Lee Hsien Loong noted that Singapore lags behind China in mobile payment. To catch up, he vowed to introduce a unified QR Code payment system within six months that would allow small and medium-size entrepreneurs to engage in cashless transitions. 
This is a step in the right direction, but why play “catch-up” when you could be leading the new era of mobile payment? Not only should Singapore’s system link up with the Chinese mobile payment mechanism, platforms and operations, it should also be ahead of China in establishing the rules of the game of smart banks and mobile payment.
Unlike the current credit-card system, mobile payment runs directly via a third-party bank, without intermediate agencies or regulatory authorities. This means that the central bank cannot monitor capital flows, nor can it monitor obstruction due to financial supervision of monetary policy control. Perhaps the most worrisome aspect of mobile payment are the potential loopholes for “flight of capital”, money laundering and privacy violation.
Of course, these are not merely Chinese challenges. As mobile payment grows globally, European, North American nations and Singapore will also face the same challenges in their financial control risks. 
As an international financial centre, Singapore can take a leading role by designing a workable global mobile payment system. By doing so, it would prevent global financial risks but also head the international transition to a mobile payment system. That move would cement Singapore’s position at the centre of global finance in this new era.
At the same time, the city-state needs to attract a large cadre of technical experts plus tech-corporation headquarters. Making the leap to a cognitive city requires proper funding, but also talent and ideas. The leap can’t be made without the holy development trinity of ideas, talent and funding.
France offers a good example here. Its regulations, language and financing prevents France from building the necessary momentum to develop within the international market. In the international market, France is often seen as having more style than substance. In fact, outstanding French companies such as Criteo, Scality and eBay realised they needed to move abroad to establish their entrepreneurial roots, thus depriving their homeland of serious economic driving forces.
Singapore meanwhile is certainly not short of capital, but has ample room to enhance talents and ideas in the cognitive realm. The good news is that talents and corporations can easily be drawn to what is one of the world’s most liveable cities, enhancing a goal of becoming the leading cognitive city. There is no doubt that Singapore can overcome the technical challenges of being a cognitive city and establishing a mobile payment system. Upgrading from smart to cognitive cities is now an unstoppable global trend. Singapore can guide the way for that trend, but only if it forges a fresh and forward-looking international vision. “Greater than the tread of mighty armies is an idea whose time has come,” said Victor Hugo. The time for Singapore’s cognitive march has come.

Feng Da Hsuan and Liang Hai Ming are senior fellows at the Institute for Advanced Studies, Nanyang Technological University. 
Both also work for the China Silk Road iValley Research Institute, Feng as senior 
adviser, and Liang as chairman and chief economist.