On August 9, 2018, Singapore will be celebrating its 53rd National Day, which every year commemorates Singapore’s independence from Malaysia with an exuberant parade, an address by the Prime Minister of Singapore, and fireworks celebrations.
This is a great occasion to review the incredible fintech journey of Singapore.
The state of fintech in Singapore
Singapore’s fintech sector has been a great growth story with more than 400 fintech firms in the country and lot more being added every year.
In Singapore, the financial sector makes up more than 12% of the economy and employs almost 200,000 workers. The government launched a massive plan in 2016 to create 3,000 net jobs in financial services with another 1,000 in fintech alone annually to support its ambition to become a leading fintech hub.
One particular segment of fintech that has been particularly prolific in Singapore is payment and transfer solutions. These products, which include GrabPay and PayNow, aim to enhance the experience of exchanging money and paying for good bought online or from brick-and-mortar stores.
Fintech apps that leverage big data and artificial intelligence (AI) to build accurate credit profiles and offer moneylending services, have been on the rise too, in addition to investment apps and robo-advisors, such as Stashaway, Bambu or Smartly.
But in 2018, one area that has gained much traction in Asia, particularly in Australia and Singapore where regulators have been strongly supportive of fintech innovation, and in India where technologies are required to enable the shift to a primarily cashless society, is regtech.
Singapore hosts numerous regtech players such as Datarama, which provides a risk management platform to make compliance-driven due diligence more efficient and affordable, and Otonomos, which uses blockchain technology to change how companies are incorporated, administered, and funded.
Separately, the Singapore Exchange (SGX) recently launched a Members’ Surveillance Dashboard, which allows data related to market misconduct to be reported, including details of alerts from SGX’s own surveillance system.
Pushing for regional collaboration
Singapore is now pushing for regional collaboration in Southeast Asia, including the development of a regional fintech innovation sandbox, and the annual Singapore Fintech Festival in November, which will focus on ASEAN.
The Monetary Authority of Singapore (MAS) also pushed on its focus on financial inclusion and started to intensify its focus on encouraging insurtech innovation.
“In ASEAN, we are starting to see phase two of the fintech revolution with bigger Chinese fintechs setting their sights on countries in the region as the next step in their growth agenda,” said Chia Tek Yew, head of financial services advisory at KPMG Singapore.
“With a large population, relatively similar macroeconomics to China, large underbanked populations and a significant number of Chinese people overseas, the region is seen as a strong stepping stone to further global expansion.
“For Singapore, not only is more investment flowing into regtech and insurtech, the country is paving the way for ASEAN in the development of a regional fintech innovation sandbox, and seeing stronger regulator support that allows for greater financial inclusion.”
According to KPMG, Singapore fintechs will continue to see 2018 as a year of execution and a year of regional expansion beyond local shores as they accelerate their growth momentum.
Singapore fintech startup C88 Financial Technologies Group raised a US$28 million Series C last month, which it said it will use partly to expand its operations to Thailand. C88 owns and operates licensed financial marketplaces for consumers and small and medium-sized enterprises (SMEs) in Indonesia and the Philippines.
Japan’s SBI Holdings recently injected US$15 million into Singapore-based AI startup AntWorks to help the startup expand its Asia presence. AntWorks has developed a technology that powers up enterprises with accurate insights through an integrated, intelligent, technology stack that automates and learns independently.