Singapore has been on the FinTech map for some time now; as a ‘preferred gateway into the Asian market’, the city-state is regularly ranked amongst the most important FinTech hubs globally. Although announcing its plans to become the world’s first ‘smart nation’ by 2030 three years ago foreshadowed Singapore’s ambitions, few could have anticipated the velocity of innovation it experienced since. Developments within the country, as well as events globally – such as the US elections and Brexit – have reinforced Singapore’s status in the FinTech industry. While rival hubs – including London, New York as well as Sillicon Valley – have faced regulatory challenges and political uncertainty, Singapore has made major strides to ensure its lucrative FinTech sector continues to flourish.
Singapore’s recent evolution as a FinTech hub is largely down to a supportive regulatory framework created by the Monetary Authority of Singapore (MAS), Singapore’s central bank and financial regulator. Unlike other market regulators, MAS is not only acting as an enabler for FinTech activity but actively contributing to the betterment of the country’s business climate. In 2015, it established the Financial Sector Technology & Innovation Scheme (FSTI), the bank’s working group set up to encourage collaboration between incumbents and FinTechs whilst also providing funding for innovative solutions to financial industry problems. On top of the s$225 million which the FSTI has set out to invest by 2020, MAS has established a new grant scheme last year, in order to provide matching funds of up to S$200,000 to promising proof-of-concept trials. 2016 also saw the establishment of the FinTech Office, a ‘one-stop virtual entity for all FinTech matters and to promote Singapore as a FinTech hub’. This was followed by the opening of the FinTech Innovation Lab, a purpose-built facility allowing the regulator to facilitate consultations with FinTechs, as well as to experiment and test their solutions against the legal and regulatory environment. Since recently, MAS’s regulatory sandbox is open to applicants to provide a relaxed regulatory framework enabling aspiring FinTechs to experiment their solutions. This supportive regulatory environment, combined with Singapore’s digital capacity and the encouragements provided by the government make the city-state an ideal place for emerging FinTechs to experiment new solutions before expanding to larger markets.
In order to succeed in an increasingly globalised world, Singapore has also acknowledged the importance of forging alliances. The city-state has set up FinTech bridges with the UK, Australia, as well as South Korea last year; these bilateral cooperation agreements enable MAS and their counterparts to mutually refer FinTech firms, as well as to share information on financial innovation in their respective markets. Demonstrating the country’s international appeal, the inaugural Singapore Fintech Festival held in November turned out to become the world’s largest FinTech event, having brought together over 10,000 financial technology experts and financial services executives.
The government’s activity has provided encouragement for private initiatives as well. The Singapore Fintech Association, a cross-industry platform, has been recently set up to foster collaboration between FinTech ecosystem participants and stakeholders. Marvelstone, a private investment group has opened Lattice80, claimed to be the world’s largest FinTech hub designed to help start-ups as well as incumbents in their efforts to innovate. R3, a leading Blockchain consortium, has opened up a dedicated research and development centre in the city-state. Large banks, including DBS and ANZ, have followed suit by opening their respective innovation labs.
2016 was an eventful year for FinTech in Singapore. Having recently been ranked as the second leading FinTech hub in the world demonstrates the progress the city-state has made in the past year in challenging leading financial technology centres around the world. Moreover, the government’s continued efforts combined with the consequences of potentially unfavourable political events in the US and the UK could soon make Singapore the FinTech capital of the world.