5 Key Fintech Takeaways From the Singapore Budget 2024

5 Key Fintech Takeaways From the Singapore Budget 2024

by February 21, 2024

Singapore has emerged as a frontrunner in the global fintech landscape in recent years, with a robust ecosystem fostering innovation and growth.

According to Statista, the transaction value of the fintech sector in Singapore is projected to soar to US$ 29.4 billion (SG$ 39.58 billion) in 2028, showcasing the sector’s rapid expansion.

Singapore accounted for 59 percent of total fintech funding in the region last year, underscoring its pivotal role in driving advancements in Asia. Major fintech subsectors, including insurtech, regtech, wealthtech, and e-payments, have thrived within Singapore’s dynamic ecosystem, attracting significant investment and attention.

Against this backdrop of growth and innovation, the Singapore Budget 2024 introduces strategic measures to propel the fintech sector forward, addressing fundamental challenges and capitalising on emerging opportunities.

An SG$2 billion boost to the Financial Sector Development Fund

The Singapore Budget 2024 recognises Singapore’s pivotal role as a leading financial centre in Asia, backed by its stability and trustworthiness amidst global uncertainties. 

Statistics from the Monetary Authority of Singapore (MAS) reveal a continued influx of investments, capital, and talent into Singapore’s financial services sector, reaffirming its attractiveness to businesses worldwide. 

With a top-up of SG$2 billion to the Financial Sector Development Fund, MAS gains additional resources to capitalise on current opportunities and extend Singapore’s lead in the financial services sector.

Andrea Baronchelli, Founder & CEO of Aspire

Andrea Baronchelli

Andrea Baronchelli, CEO and co-founder of Singapore-founded fintech start-up Aspire, applauds this move, recognising it as a crucial step to spur digital readiness among industry players.

“The injection of SG$2 billion into the Financial Sector Development Fund (FSDF) from the Singaporean government will enable firms to spur technology adoption as well as extend support for talent development and upskilling efforts to cultivate a digital-ready workforce,”

said Andrea.

In addition, diversification into emerging sectors like fintech, green finance, and transition finance is prioritised to sustain Singapore’s competitive edge.

This substantial funding will enable fintech firms to accelerate technology adoption and innovation, fostering a conducive environment for growth and expansion within the industry. The availability of resources for talent development and upskilling efforts will also contribute to building a robust fintech ecosystem in Singapore.

By nurturing a dynamic ecosystem conducive to fintech innovation, Singapore positions itself as a preferred destination for fintech companies and investors seeking growth opportunities in the region.

SG$3 billion boost for RIE2025 for driving sustainable innovation

The Singapore Budget 2024 underscores the importance of Research and Development (R&D) in driving economic growth and innovation. With a commitment of SG$3 billion to the Research, Innovation, and Enterprise 2025 (RIE2025) plan, Singapore aims to sustain investments in research, innovation, and enterprise at about one percent of GDP. 

These investments are expected to fuel advancements across various national priorities, including advanced manufacturing, sustainability, digital economy, and healthcare.

While R&D initiatives may take time to translate into concrete outcomes, they play a crucial role in developing a critical mass of capabilities, ideas, and talent. 

By investing in R&D, Singapore strengthens its competitive edge globally as a knowledge-based and innovation-driven economy. In addition, the focus on long-term sustainability ensures that Singapore remains resilient and adaptable to evolving economic challenges and technological disruptions.

This creates an environment ripe for innovation in the fintech sector, enabling firms to develop and deploy cutting-edge financial solutions more efficiently.

Catalysing innovation and talent development with SG$1 billion investment in AI

Technology, particularly Artificial Intelligence (AI), is identified as a transformative force with the potential to enhance productivity and drive innovation across industries.

The National AI Strategy 2.0 outlines plans to invest over SG$1 billion in AI computing, talent, and industry development over the next five years. 

These investments aim to establish Singapore as a global AI development and deployment leader, fostering collaboration between government, industry, and academia.

Initiatives to upgrade the national broadband network and promote emerging technologies like immersive experiences demonstrate Singapore’s commitment to building a digitally inclusive society and economy. 

By harnessing the power of technology, Singapore aims to unlock new growth opportunities, improve efficiency, and enhance the quality of life for its citizens.

Embracing sustainability for competitiveness

Sustainability is increasingly recognised as a source of competitive advantage for businesses in Singapore. Enhanced support for green loans under the Enterprise Financing Scheme reflects Singapore’s commitment to promoting sustainability initiatives among small and medium-sized enterprises (SMEs).

 By adopting green solutions, SMEs can reduce their environmental footprint and attract multinational corporations (MNCs) seeking environmentally responsible suppliers.

Expanding energy efficiency grants and additional support for companies aiming to reduce emissions further underscores Singapore’s commitment to sustainability.

These initiatives align with global efforts to mitigate climate change and position Singaporean firms as leaders in sustainable business practices.

Fintech firms involved in sustainable finance, green technology, and environmental risk management will find new opportunities for growth and collaboration.

Strengthening cybersecurity defences

Cybersecurity is paramount to safeguarding Singapore’s digital infrastructure and financial services sector in an increasingly digitized world.

Establishing a new National Cybersecurity Command Centre at the Punggol Digital District aims to enhance coordination between government agencies, industry partners, and academia to strengthen Singapore’s cybersecurity defences. 

By investing in cybersecurity capabilities, Singapore seeks to detect, mitigate, and respond to cyber threats effectively, ensuring the resilience of its digital ecosystem.

Statistics on cyber threats highlight the growing sophistication and scale of cyberattacks globally, underscoring the importance of proactive cybersecurity measures. 

Singapore aims to maintain trust and confidence in its financial services sector by prioritising cybersecurity and bolstering its reputation as a safe and secure destination for businesses and investors.

Navigating the fintech landscape with practicality

The Singapore Budget 2024 offers practical steps for managing the challenges and opportunities in the fintech sector.  The budget aims to ensure steady progress while maintaining stability by strengthening Singapore’s financial and technological foundations.

The budget supports innovation across various sectors through targeted investments in research and development. These initiatives address real issues and build a sustainable future rather than making grand promises.

Additionally, the budget’s focus on cybersecurity demonstrates Singapore’s commitment to protecting its digital infrastructure without resorting to complex terminology.

By recognising the evolving threats and taking practical measures to defend against them, Singapore aims to keep its financial services sector safe and reliable.

With this pragmatic strategy, Singapore is well-positioned to navigate the complexities of the fintech landscape and emerge even stronger in the years to come.

Featured image credit: Edited from Freepik