July 6, 2016
Singapore can be considered one of the gems of the global financial services industry ecosystem with ~200 banks with total assets of $2 trillion having operational headquarters in Singapore. IT procurement budgets of these banks reached $485 billion in 2014.
With global trends towards tight collaboration among traditional financial institutions and FinTech startups, Singaporean financial services providers also made a step forward nurturing incubation and FinTech ecosystem development. Global banking giants are building an innovation conveyor to ensure a leading position as a global financial market. Some of the examples are MasterCard, UBS, DBS Bank, OCBC, Wells Fargo and Citigroup, which launched their innovation labs and accelerators in Singapore along with significant investments in the ecosystem.
Global financial services companies have their Asian satellites operating from Singapore including AmEx, Citibank, JPMorgan Chase, HSBC and numerous other international financial organizations. For a better understanding of the Singaporean FinTech industry, we previously have looked at some examples of FinTech startups, investors, accelerators and conferences taking place in Singapore, which at the end, have built an outstanding ecosystem by innovative solutions and opportunities.
A variety of FinTech startups across sectors are building the Singaporean FinTech ecosystem. Among them are ApexPeak (a nonbank capital provider offering early payments on receivables), BillPay (a free unified billing and payment service), Call Levels (real-time alert notification on current market prices in forex, commodities, equities and indices), Capital Match (provides short-term financing to SMEs), CoAssets (a business network for property investment and equity crowdfunding enthusiasts), CoinHako (a cryptocurrency wallet), CoinPip (uses blockchain technology to send money internationally quickly and easily to freelancers), Dragon Wealth (the world’s first app to enable investors to compare their portfolios across managers, portfolios, countries, and with other investors, giving investors greater control over their investments) and many others.
Vladislav Solodkiy, Managing Partner of a Singapore-based Life.SREDA VC, recently commented on Singapore’s FinTech industry, Singapore sits at the epicenter of a diverse range of markets rich with opportunity. New success stories are emerging throughout the region, such as GrabTaxi, which is experiencing explosive growth and attracting substantial investment. Singapore is one of the gateways of the Asian financial market with a rich FinTech ecosystem.
Singapore’s government is one of the most progressive entities that aims to actively support and foster innovation. The Monetary Authority of Singapore is one of the financial authorities internationally to launch a FinTech Regulatory Sandbox.
The FinTech Regulatory Sandbox by MAS is not the first initiative by the governmental structure to endorse innovation. In July 2015, MAS also launched FinTech & Innovation Group (FTIG), which is responsible for regulatory policies and development strategies to facilitate the use of technology and innovation to better manage risks, enhance efficiency, and strengthen competitiveness in the financial sector.
In November 2015, The Prime Minister of Singapore urged the country's banks and regulators to keep up to scratch with technological developments such as blockchain technology.
As the Prime Minister commented at the United Overseas Bank 80th anniversary dinner, "Looking ahead, the banking industry is entering a new challenge... The operating environment has become more challenging, but on top of that, technology is moving very fast with new business models disrupting traditional banking. For example, more and more people are making payments through their smartphones."
"...there are other technologies, like blockchain, which is used for bitcoin but can also be used for many other applications like real-time gross settlement, or trade finance verification. So our banks and our regulators must keep up to date and up to scratch with these developments," added the Prime Minister.
Not only are the efforts of Singaporean government are catalyzing the move towards the first prize as the FinTech center of Asia, but external factors like Brexit seem to fuel the fire going on in Singapore around financial technology. As reported by Reuters on Sunday, Singapore is attracting interest from among the ~60,000 FinTech firms based in London's near-$9 billion market – a trend likely to accelerate with Britain's referendum vote to leave the European Union.
Markus Gnirck, Partner and Co-founder of tryb, a private equity investment partnership, commented to the source, "We already have registered interest from UK-based companies to move to Asia as it's getting very crowded there. Brexit will probably accelerate a few of these conversations." The company also noted that all but a dozen of ~210 FinTech firms operating in Singapore have opened in the past two years – the fastest growth rate in Asia.
Taveet Hintikus, CEO of P2P money transfer firm TransferWise, has also expressed interest in the developments in Asia as Europe becomes a much less attractive place for entrepreneurs and Asia appears to be a more vibrant FinTech center than Hong Kong.
Later this year, MAS will be hosting the Singapore FinTech Festival that will include a Global FinTech Hackcelerator apart from FinTech awards and conferences. The aim of the Hackcelerator is to create market-ready solutions for 100 industry problem statements. MAS Hackcelerator is inviting teams from around the world to submit their ideas and proposals. In August 2016, 20 teams will be shortlisted to join the 10-week Global Fintech Hackcelerator and present their solutions during demo day on November 15, 2016. The depth of the 100 problem statements that have been been put together is amazing and truly world-class.