Various

5 Singaporean Fintech Startups MAS Should Consider Supporting

Announced in August 2014 by Prime Minister Lee Hsien Loong, Singapore’s Smart Nation initiative will lead to the city-state’s transformation into the world’s first smart nation; in other words, a hyper-connected country where the pervasive use of technology is expected to bring improvement in the quality of life of people.

This digital transformation, which is expected to be fulfilled by 2030, consists in connecting “everyone to everything, everywhere, and all the time.” And by doing so, Singapore hopes to become smarter, cleaner and more efficient.

“We had set our vision to become a Smart Nation that harnesses technology to discover breakthrough solutions in the areas of ageing, mobility and transportation, and importantly, develop a safe and secure data marketplace,” said Jacqueline Loh, Deputy Managing Director at the Monetary Authority of Singapore (MAS), in a keynote earlier this month.

“Likewise, MAS seeks to create a Smart Financial Centre, where technology is used pervasively in the financial industry to increase efficiency, create opportunities, allow for better management of risks, and improve lives.”

Working towards the vision of a Smart Financial Center, MAS said in June that it will partner with the industry and support the local fintech ecosystem by various means, including financial support through an initiative called the “Financial Sector Technology and Innovation” (FSTI) scheme.

Under the FSTI scheme, MAS said it will commit S$225 million over the next five years to help fund the creation of innovation centers, as well as institution-level projects and industry-wide projects.

Although parts of the funds have already been committed, we have compiled a list of some of Singapore’s most promising startups which MAS might want to consider supporting.

Mobile Payments Gone Social with Fastacash

As mobile devices are becoming commonplace, mobile technology and payments have been two priorities for MAS.

“People do not just connect and surf from their home computers anymore,” Ravi Menon, Managing Director of MAS, said in a speech in June announcing the Smart Financial Center initiative.

“Online payment services have made it possible for people and businesses to transfer funds safely at very low cost.”

Among the big trends that Menon mentioned that day, mobile and digital payments figured on the list.

Thankfully, Fastacash is a startup that allows both mobile peer-to-peer payments and person-to-merchant payments.

Its selling point is that Fastacash leverages social network channels and messaging platforms to make the whole mobile payment and money transfer process simpler, more convenient and social.

MatchMove Pay: Digital Wallets and Virtual Cards

Another startup that seeks to disrupt the payments industry is award-winning startup MatchMove Pay.

MatchMove Pay provides users with virtual cards linked to digital wallets. This virtual debit card, which roughly costs around S$5 per year, is basically a series of 15 or 16 digit card number that allows consumers to use the balance in their MatchMove Wallet typically to shop online.

Earlier this month, the company was granted a remittance license from MAS to tap into Southeast Asia’s estimated US$50 billion remittance market, according to CEO and founder Shailesh Naik.

The new service will allow Singapore residents to send faster and lower cost remittances to the Philippines, India, Vietnam, Indonesia, Thailand and Malaysia. Recipients will be able to collect cash from any of the 250,000 available locations, Naik said.

Reinventing Online Banking Security with BankGuard

As Singapore dives into the digitalization of its financial industry, cyber security has become a growing concern.

One startup that could ease this concern, notably in terms of Internet banking security, is named BankGuard. This Japanese startup has developed an innovative solution that addresses the weaknesses of current solutions on man-in-the-middle attacks.

Its patented two-factor authentication solution, called the SuperMatrix, utilizes images rather than numeric one-time passwords that can be either printed or affixed on a back of a debit or credit card.

Dr. Haruhiko Fujii, CEO and CTO at BankGuard, said that he intends to pitch the solution to the Singaporean Government “since this is a crucial piece of security technology that involves financial institutions.”

Blockchain and Distributed Ledgers

Along with digital and mobile payments and cyber security, another big trend in technology affecting finance, according to Menon, is blockchain technology and distributed ledgers.

In fact, MAS is reportedly backing “a decentralized record-keeping system based on blockchain technology” as part of its FSTI fund.

Interestingly, Open Trade Docs, a startup that was accelerated by Startupbootcamp Fintech Singapore, provides with a system for dematerialized trade documents. Startupbootcamp Fintech Singapore is an accelerator program backed by Infocomm Investments, the investment arm of Infocomm Development Authority of Singapore, as well as by other major financial institutions, tech firms and VC firms.

Another startup that is using blockchain technology to digitally record information is Otonomos, a startup founded by “Wall Street disillusionists” led by ex-Goldman Sachs banker Han Verstraete.

Otonomos is a blockchain startup that helps entrepreneurs incorporate their businesses on digital distributed ledgers, allowing massive disintermediation in traditional processes.

Its online service allows users to form, fund and govern their companies on the blockchain “to bring to digital what has been done in an analogue way for so long,” Verstraete said in an interview.

Faster and more efficient processing, lower cost of operation and greater resilience against system failure, are often the benefits cited of using distributed ledger systems.

In the banking and financial industry, some firms and institutions have opted for the Ripple protocol. In Australia, three of the country’s “Big Four” banks, namely the Commonwealth Bank of Australia (CBA), Westpac Banking Corporation and the Australia and New Zealand Banking Group, are reportedly testing out payment technology from US-based company Ripple Labs, for frictionless nearly instantaneous funds transfers.

Image credit: Singapore, Pixabay.