Singapore’s position as an international fintech hub has always been bolstered with strong regulatory support from its central bank, the Monetary Authority of Singapore (MAS). Fintech is key for Singapore’s future as a global financial hub, which contemplates a world moving at a much faster pace and with much greater efficiency.
Financial institutions need to digitalise, but this requires collaboration with fintech disruptors who are the ones developing new technologies and business models.
An overview of the fintech scene in Singapore shows how fintech firms there garnered US$229.1 million in investments in 2017; while total funding so far this year so far amounts to US$30.7. The industry has also thus far contributed 2,000 jobs out of the target of 4,000 by 2020, an update by the MAS showed.
Wealthtech & blockchain platforms on the rise
The trend to innovate is a global one, in a changing world which is now harnessing automation to drive cost savings and efficiency. Recent developments in Singapore’s fintech scene of late arguably reflect this.
In Singapore there’s been an increase in investment and wealth management (or wealthtech) investment startups as well as blockchain & cryptocurrencies startups since 2017. Investment platforms, or wealthtech form the greatest slice of the market, followed by payments and blockchain platforms.
Globally, the wealthtech market segment attracted US$2.5bil in 2017 and in 2018, has already reached US$2bil within the first quarter. In particular, demand for wealthtech has been driven by client demands to increase investment returns as well as for fees to become more transparent.
Meanwhile Singapore’s blockchain & cryptocurrency-based firms rose by from 23 in 2017 to 35 this year, spread over the use of blockchain to facilitate smart contracts, payments, record systems and cryptocurrency exchanges.
Singapore’s ICO market is the third largest in the world after the US and Switzerland. Though MAS has issued guidelines for ICOs, as of May 2018, there’s yet to be any ICO prospectus registration with the regulator
MAS’ role in fostering fintech
The MAS’ role in encouraging fintech development has taken on a variety of approaches.
In 2017, it announced a US$20 mil grant scheme dedicated towards the development of AI and data analytics projects.
It subsequently launched 80RR space as a fintech innovation hub last year, in what could become key to attracting international tech talent to Singapore’s shores.
Its Regulatory Sandbox was launched as a mechanism to foster development of new financial technologies within clearly-defined boundaries. Its 2017 graduate PolicyPal most recently launched a blockchain-based flight delay insurance offering automated claims for inconvenienced travellers.
Collaborating With ASEAN for Wider Financial Inclusion
If Singapore’s competitiveness as a fintech hub is to be maintained it needs to keep up the flow of new ideas and collaborations on its turfs.
Project Ubin is one example of an initiative intended to drive collaboration. Led by MAS, it essentially involves the collaboration between Singapore Exchange Ltd, fintech companies and eight local and international banks to explore the use of blockchain for interbank payments.
Since 2016, MAS has also organised the Singapore Fintech Festival to provide opportunities for learning and collaboration. The festival attracted 30,000 participants from 109 countries last year. This year’s edition, which will be held from 12-16 November, will zoom in on fintech development opportunities in the ASEAN region.
Some groundwork has been laid through the establishment of the ASEAN Financial Innovation Network (AFIN). AFIN targets fixing issues of connectivity and cross-border compatibility, amongst other issues.
In particular, an important aim for fintech collaboration within ASEAN is towards wider financial inclusion.
Talent Shortages Remain Challenging For Singapore’s Fintech Future
What remains a challenge is Singapore’s tech talent shortage. 61% of Singapore’s fintechs were said to hire foreign talent in 2017. Even in hiring foreign talent, there remain barriers to address, such as the lack of access to foreign talent. As such, about 35% of fintech companies on the other hand face issues even in hiring foreign tech talent.
Fintech Singapore Map 2018:
Featured image credit: Pexels
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