Singapore’s financial technology (fintech) sector continues to grow, overcoming many challenges to provide citizens with digital monetary solutions. Every fintech Singapore 2022 trend is positive, with the city-state seeing a rise in demand for financial services from emerging tech-enabled startups and the general public.

Blockchain and cryptocurrency are at the top of the list with a 20% share of Singapore fintech startups in 2022, according to the distribution of Singapore fintech startups by sector. . Digital payments are ranked second with 17%, while investments and Wealthtech are ranked third with 13%. Other sectors include Regtech, which has a 10% share, insurtech has 8%, lending has 8%, and Big Data has5%, while the rest have a 4% or lower share.

Fintech trends 2022: What is embedded finance and why is it crucial for digital finance in Southeast Asia?

The fintech boom in Singapore can be attributed to the government’s encouragement of digital transformation, the switch to online services and shopping, and the rise of financial literacy among Singapore’s tech-savvy citizens. The city-state serves as a financial hub for the area and Asia-Pacific (APAC), and its residents are always looking for more convenient and practical technologies to improve their lives. Moreover, rising smartphone adoption, which currently stands at 8.70 million mobile connections and internet use at 92% penetration, has positioned the nation for fintech success.

Emerging trends and challenges in the fintech industry

According to SYNC’s Southeast Asia, the Home for Digital Transformation report, the internet and technology industries received 80% of venture capital (VC) investment, with the fintech industry receiving the most. Emerging fintech trends include embedded finance, Buy Now Pay Later (BNPL) payment model, eWallets, Peer-to-Peer (P2P) fund transfers, and cryptocurrency. Embedded finance is a type of finance that incorporates financial services with non-financial products or services in various sectors.

Insufficient funding, a lack of resources, tech talent shortages, cybersecurity, and the inability of underfunded startups to provide uninterrupted financial services are some of the challenges surrounding Singapore’s fintech sector. In a broader sense, the Russia-Ukraine war is affecting global supply chains, which means that global trade will be restricted. Tensions also exist over China’s stance on Taiwan and the South China Sea, which is a source of contention in the APAC region.

Regardless, the Singaporean government’s continued financial and regulatory support, as well as increased investment from VC companies and foreign investors, are laying the groundwork for the fintech sector to really boom this year.

What 2022 and the future hold for Singapore fintech startups

According to the Singapore Fintech Report 2022, the country’s economy is supported by established financial and digital infrastructure. Within the city-state, there are 132 banks operating, 6.55 million credit card holders (out of a population of 5.9 million), and 18.2 million financial cards in circulation (documented in 2020).

On the digital side, by the end of 2021, 82.5% of Singaporeans aged 25 and 34 had purchased something online. Regular online shoppers account for 56.6% of the population, internet users account for 90%, and mobile connections account for 145.5% of the population in 2021.

PayNow, Singapore’s electronic fund transfer service, has doubled its registrations, putting 80% of companies and the general public on the platform. The service operates on the Fast and Secure Transfer (FAST) payment rails, which allows for real-time payment capabilities and other benefits Singapore’s decision to extend PayNow to non-bank financial institutions will accelerate the country’s embrace of digital payments.

By 2024, digital wallets will have surpassed credit cards as the preferred online payment method. The BNPL payment model is expected to grow the fastest, as Singapore fintech startups have discovered it to be a convenient and timely alternative for their customers to complete purchases. eWallets will be led by payment providers like GrabPay. FAST and PayNow will be used by these companies to provide real-time payment capabilities, as well as fund transfers to wallets or other businesses.

Singapore’s digital banks are expected to become operational in 2022, and the companies chosen by the Monetary Authority of Singapore (MAS) have seen a number of changes. Grab Holdings is a publicly listed company on the U.S stock market, and its partnership with Singtel (Grab-Singtel) is one of the favourites to secure a second licence to operate in Malaysia.

Sea Limited’s stock has dropped dramatically recently, but its executives believe the company will recover. The third group to receive a banking licence, Linklogis Hong Kong, which is part of a consortium, raised $1 billion USD in an IPO in Hong Kong. 

Finally, China’s Ant Group has struggled due to its country’s clampdown on tech giants, but it appears to be on the verge of acquiring a majority stake in Singapore-based payments platform 2C2P.

Despite many hurdles, the fintech Singapore 2022 trends predict that finance-based businesses will remain resilient. Once digital banks become operational, they will improve financial services and the ecosystem, enabling smaller startups to thrive. Thus, the fintech boom in Singapore is set to continue for the foreseeable future, as the industry is sustained by innovations and investments.