The rapid growth of fintech in Singapore has driven the island nation to become Southeast Asia’s hub for this burgeoning sector, holding over 40% of the market share in the region. The country was ranked in 1st place for networked readiness in the 2016 World Economic Forum Global Information Technology Report and is the world’s 6th largest financial centre according to the Global Financial Centres Index. A KPMG report revealed that Singapore’s fintech funding reached record heights in 2017, with an investment of $229.1 million USD

There are currently over 1000 fintech startups in Singapore, mainly focussing on payment, lending, investment and personal finance. With a COVID induced rise in the move to online financial transactions, Singapore as a fintech hub is likely here to stay.

Government support 

The country has established itself as a fintech leader, thanks, in part to the continuous support of its government policies and regulatory bodies, such as the Monetary Authority of Singapore (MAS). 

In August, the latter committed to investing S$250 million under the Financial Sector Technology and Innovation (FSTI) scheme to promote Singapore’s fintech ecosystem for the next three years. To enhance the country’s financial inclusion, MAS developed guidelines for the central bank to endorse an open Application Programming Interface (API) and a platform for financial institutions and non-financial players to experiment with fintech solutions. It also provides expert consultation to startups through its fintech innovation lab, Looking Glass @ MAS, and granted a total of S$125 million to support funds to help the financial and fintech sectors deal with COVID-19 challenges. 

From the 21 applications for digital bank licenses received in January 2020, MAS has shortlisted 14 eligible applicants and will award three digital wholesale and two digital full bank licences by the end of this year.

Additionally, patent-granting for fintech startups has been sped up by the Intellectual Property Office of Singapore (IPOS) now just taking six months to complete. 

The country has also eased the requirements for its working visa-granting programme to help attract more international businesses and entrepreneurs.

Local startups achieving success

Four Singaporean companies made it to the 2019 KPMG Fintech 100 list, with Grab’s eWallet ranking in second place. Independent life insurance company SingLife ranked 40th, while digital insurance manager PolicyPal and AI-based bank organisational system Silot were in the top 50 emerging list. 

Southeast Asia’s leading app, Grab, and its fintech services are experiencing wide adoption, enabling consumers to purchase transportation tickets, make hotel bookings or complete transactions at stores and restaurants. According to DBS Group Holdings Ltd., a Grab Holdings Inc. (60% stake) and Singapore Telecommunications Ltd. (40% stake) partnership, is a strong candidate for a full consumers’ digital banking license, which might lead the latter to commit more than $440 million USD to the project in the long run. 

With Grab’s over 187 million regional users and Singtel’s 4.3 million subscribers, the consortium has the potential to gain a 2%-4% share of the local consumer market—excluding mortgages—and feasibly break even within five years.

Other players seeking full-digital bank permits include Internet platform provider Sea Ltd, backed by Tencent Holdings Ltd, and a consortium led by leading gamer-electronics provider Razer Inc. 

Other companies to watch are InstaReM, Funding Societies, Kyber Network and TenX.

Fostering expansion 

Apart from robust government backing, the industry also has the support of the Singapore FinTech Association, a non-profit organisation which encourages partnership amongst all parties in the ecosystem. 

Several universities and colleges have incorporated fintech modules in their syllabus, thus contributing to a tech-savvy and highly educated workforce. 

Singapore is also strengthening industry networks in the ASEAN region by sharing its expertise. Academic institutions—such as Temasek Foundation International and Ngee Ann Polytechnic—are collaborating with the Indonesian government to implement a fintech programme for tertiary students there.

Furthermore, the country hosts the world’s largest fintech festivalSFF x SWITCH—with over 60,000 participants from almost 140 countries. The annual, week-long event features guest speakers and exhibitors from the fields of technology, trade, blockchain and more, and also hosts a prestigious awards ceremony.

Due to the pandemic, this year’s event is the world’s first week-long, round-the-clock, hybrid digital and physical event. Starting on December 7th, participants can connect to an online city experience or attend in person at physical locations around the globe.  
Singapore as a fintech hub has grown thanks to a proactive regulatory framework and policies that promote a sustainable financial services ecosystem. Fintech startups in Singapore continuously incubate new ideas and offer a plethora of fresh solutions for consumers and businesses alike. Despite the size of the nation, fintech in Singapore leads Southeast Asia in terms of total investment dollars in the sector and growing user adoption, therefore playing a crucial part in the development of financial technology in the ASEAN region.