Singapore Fintech Report 2021: Blockchain Dominates Singapore’s Fintech Scene

Singapore Fintech Report 2021: Blockchain Dominates Singapore’s Fintech Scene

by January 18, 2021
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Singapore’s fintech industry continued its momentum in 2020 on the back of new regulations, fintech initiatives from regulators themselves and the introduction of the city state’s very first digital banks, according to the Singapore Fintech Report 2021 produced by Fintech News Singapore in partnership with Alibaba Cloud.

The Singapore Fintech Report 2021, released in January 2021, which can be downloaded here, looks at the state of the fintech industry in Singapore, highlighting the key developments made in 2020 that are set to shape the industry for the year to come.

The report indicated that 2020 was a fruitful year for Singapore’s fintech startups which continued to grow and attract funding. Fintech investment in Singapore reached US$346 million in 2020, representing 6.2% of all that was raised in Asia.

The sector continued to mature and consolidate with several acquisition deals taking place last year including the purchase of robo-advisory fintech Bento by Grab, and the merger of insurtech player Singlife with Aviva Singapore.



The year also saw the granting of four digital banking licenses. Two digital wholesale bank licenses went to Ant Group, and a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management, and two digital full bank licenses were awarded to the Grab-Singtel consortium and tech giant Sea.

These four digital banks will not have traditional brick and mortar branches but will market their services and operate almost exclusively online. They are expected to shake up the banking industry by applying cutting edge technology to serve financially excluded population. Singapore’s digital banks are set to start business from early 2022.

In 2020, Singapore showed its commitment to open banking with the Monetary Authority of Singapore (MAS) and the Smart Nation and Digital Government Group (SNDGG) launching the Singapore Financial Data Exchange (SGFindex). The infrastructure makes use of Singapore’s National Digital Identity (SingPass) to allow citizens to obtain their financial information from different financial institutions and government agencies.

Leveraging SGFinDex, Singaporeans can consolidate all of their finances through financial planning services offered by financial institutions as well as through MyMoneySense, a free financial planning digital service offered by the Singapore government.

Singapore Fintech Report 2021: Blockchain takes center stage

One fintech vertical that has risen to prominence in Singapore is blockchain and cryptocurrency, which now dominates the local fintech scene.

Out of the 430 fintech startups identified in Singapore, 19% operate in the blockchain and cryptocurrency vertical, making it the biggest segment, ahead of payments (16%), investments and wealthtech (14%), and regtech (11%).

2020 saw the city state show support for the sector with the launch of a new S$12 million blockchain research program. The Singapore Blockchain Innovation Program aims to accelerate the development and adoption of the technology, and will engage close to 75 companies to conceptualize 17 blockchain related projects within the next three years in sectors starting with trade and logistics, and supply chain.

The year also saw the Payment Service Act (PSA) come into effect, requiring cryptocurrency businesses to obtain a license from MAS to comply with anti-money laundering/combating the financing of terrorism (AML/CFT) regulations. Singapore’s new legislation has been praised for providing regulatory clarity on the emerging asset class and industry, and could potentially lure companies in the space into setting up shop in the city state.

Singapore Fintech Report 2021: Overview of MAS’ payments modernisation efforts

In the payments space, Singapore continued to modernize its payment infrastructure in 2020, with a main area of focus being interoperability and real-time transactions.

MAS said in November 2020, that starting from February 2021, eligible non-bank financial institutions in Singapore will have direct access to PayNow and FAST, the country’s retail payment platforms, through a new API payment gateway.

From a customer’s perspective, this means that e-wallet users will soon be able to make funds transfers between bank accounts and across different e-wallets. Currently, most e-wallets can only be topped up via credit or debit cards, and funds cannot be transferred between e-wallets.

Singapore has also been working with neighboring countries to connect retail payment infrastructures. In December 2020, MAS announced that the linkage between Singapore and Thailand’s national faster payment systems will officially go live in mid-2021. The project, which has been in the works for three years, will connect Singapore’s PayNow system with Thailand’s PayPrompt to make cross-border payments cheaper and faster.

MAS managing director Ravi Menon has said that the regulator was interested in working with other central banks in the region to expand the linkage across Southeast Asia.

Singapore Fintech Startup Map 2020

Download the full Singapore Fintech Report 2021 here

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