Fintech (short for ‘financial technology’) has seen massive growth in Singapore, rising from just 18 fintech startups in 2015 to more than 300 today.
That’s an increase of over 1600% over the last two years!
Hence, it is no surprise that Singapore is currently leading the fintech wave in Southeast Asia; which coincides well with the city-state’s Smart Nation goals to create a society empowered by technological developments.
Current circumstances are also well-suited for growing Singapore’s fintech potential. Singapore serves as the Asian headquarters for a variety of financial institutions, enabling it to host over 200 banks with total assets of US$2 trillion.
Regulatory support for fintech has also been strong with Singapore’s de facto central bank, The Monetary Authority of Singapore (MAS), launching a dedicated Fintech and Innovation Group in 2015.
This has since spawned a few other initiatives:
- such as a partnership with the National Research Foundation to set up a one-stop point-of-contact office for all fintech matters,
- a commitment to US$160 million over five years to support the development of the fintech scene under the Financial Sector Technology & Innovation (FSTI) scheme,
- the creation of a fintech regulatory sandbox for experimentation,
- a shift towards an open-Application Programming Interface (API) architecture,
- 100 Problem Statements for global fintech issues alongside the inaugural Singapore Fintech Festival
- the opening of MAS’s own FinTech Innovation Lab – the “Looking Glass @ MAS” – to spur collaboration between MAS, financial institutions, start-ups and technologists.
With this favourable environment, Singapore has also seen the launch (or imminent launch) of over 20 innovation labs focused in the fintech space. Both global and regional financial institutions like Mastercard, VISA, DBS Bank and OCBC have chosen Singapore to develop this potential.
Unfortunately, talent looks to be a limiting factor to the continued growth of the fintech industry. In a survey conducted by the Infocomm Development Authority of Singapore in 2015, 5,100 job vacancies are expected to open up in the network and infrastructure sector from 2016 through 2018. A further 5,700 jobs in data analytics and cyber security is also expected, creating a gap in demand.
However active steps are underway to meet the demands of the market. A new Memorandum of Understanding (MoU) was signed between the Singapore Fintech Association (SFA) and the five local polytechnics in Singapore as part of efforts to deepen collaborations between educators and the fintech industry. To add to the fintech element, the MoU was signed via the Attores smart contract platform.
The programme presents opportunities by being at the intersection of start-ups, financial institutions and regulatory bodies.
Key plans for 2017 include:
Innovation Lab Crawls
- where students get to visit at least 10 innovation labs and experience tours and programmes which will help them understand the impact of innovation from established companies such as VISA, Mastercard, HSBC and OCBC.
- in fintech-related roles locally and across borders at start-ups, financial institutions and regulatory bodies within the fintech community. This is part of a strategy to expose students to both regional and global markets. Industry practitioners, venture capitalists and incubators will also share their expertise and enhance the knowledge of students.
- will also present another avenue for further development in the fintech community. Domain experts from a company and/or industry will update about new technological, regulatory and other associated advancements at different innovation labs. V-Key, a digital security startup, is set to host a workshop on how advanced mobile security can enable digital banking innovation.
As mentioned by Ravi Menon, MAS Managing Director, at the inaugural Singapore Fintech Festival,
“To be sure, many of these technologies are disruptive to existing jobs and existing business models… But if we do not disrupt ourselves – in a manner we choose – somebody else will – in a manner we will not like.”
It has demonstrated the viewpoint of Singapore in aiming for a collaborative environment for fintech.
This focus, avoiding the perspective of a zero-sum game, can offer opportunities for corporates to explore and experiment with new business models.