Mankind’s first spaceport, the Baikonur Cosmodrome, was founded by the Soviets in 1955. Its location in Kazakhstan was chosen for its low latitude, sparse population density, railroad access, and proximity to water supplies, all factors needed to launch an unwieldy rocket into space. Still in use today, Baikonur is a testament to how success often hinges on starting with the right place.
In many ways, aspiring FinTech startups face a similar problem. Finding the right country to launch one’s brainchild can mean the difference between it becoming a star and a firework. We share the merits of Singapore as a launch pad for FinTech startups and discuss how The FinLab can be the accelerator for your startup in Singapore.
Centers of gravity
For a budding FinTech, one of the first considerations should be the country of launch and base, such as global financial centers. Mature financial industries normally seek out cutting-edge solutions to achieve productivity growth. Also, their larger flows provide more opportunities for value creation, fostering a rich FinTech space. In contrast, developing counterparts can rely on acquiring unbanked customers and climbing the visible value chain for growth, reducing the urgency for FinTech adoption. Hence, financial hubs allow FinTech startups to plug into a larger network of potential partners and customers. Coupled with robust infrastructure and business environments, they are prime locations for FinTechs to get started.
Different pads, different planets
In selecting amongst financial centers, it is beneficial to consider one’s target market. Financial centers are generally best integrated with their own regions – US, UK, Hong Kong and Singapore with North America, Europe, China and South East Asia respectively. Preferably, one’s business model and value proposition should interact well with the region’s characteristics.
In addition, the merits of the country itself should be assessed. Notably, market forces can only reward good ideas if two factors are in place. First, political support is vital to enable FinTech to navigate a sea of financial regulations. Without a cooperative regulatory partner, startups are likely to be mired in rules that were designed for traditional banking. Second, capital availability grants FinTechs more opportunities to raise funds, which allows businesses to expand operations and build credibility. Startups may also opt to fundraise with accelerator programs, which can provide the added benefit of business mentorship and networks.
To expand on these points, we zoom into Singapore, which has become increasingly attractive to FinTech startups as a launch pad.
Space bound from Singapore
Singapore is both a sensible and easy place to set up a FinTech. Ranked as Asia’s top financial center by the Global Financial Centers Index 2016, Singapore boasts a highly developed financial system that is well integrated with the ASEAN region. It was touted as the world’s easiest place to do business by the World Bank in 2016 due to a host of factors, including rapid business incorporation and low startup costs. Compounded with a world-class infrastructure, highly skilled workforce, and political stability, Singapore has many qualifiers as a base of operations for FinTech startups.
Connections to ASEAN markets
Moreover, Singapore stands out for several reasons. First, Singapore is well-connected to the ASEAN region, being a trusted provider of financial services. ASEAN enjoys high economic growth with its 2015 GDP growth of 5.9%, outpacing most developed regions. Also, ASEAN, comprising separated markets at varying stages of development, has a great diversity of problems that require solutions. The unbanked, wealth managers, and migrant workers across the region all face different pain points that can potentially be solved by FinTechs.
Second, the Singapore government has a clear direction to attract FinTech startups in its bid to transform the nation into a smart financial center. Statutory boards offer grants and industry support, whilst regulators work closely with FinTech startups to enable their business development. The government puts its money where its mouth is; in 2015 the Monetary Authority of Singapore (MAS) committed S$225 million to growing the FinTech startup ecosystem in Singapore.
Funding and grants
Finally, Singapore offers FinTech startups diverse opportunities for funding. Numerous venture capitalists, government grants and financial institutions in the country are on the lookout for strong solutions to harness. There are also many accelerator programs that seek to boost startups, often providing entrepreneurship workshops, business networks and all-rounded mentorship.
With a range of business enablers, it is not difficult to see why FinTech startups worldwide come to Singapore to shoot for the stars. Indeed, FinTech startups here are likely to be constrained only by the size of their ideas.
The FinLab wants to bring your startup to infinity and beyond
Singapore may be a great place to launch your FinTech startup, but you will need a strong local partner to make the right connections for you. This is where The FinLab can help.
The FinLab, Singapore's first corporate FinTech accelerator, is a joint venture between United Overseas Bank (UOB) and SG Innovate (SGI). UOB is a leading bank in Asia with a global network of more than 500 offices in 19 countries. SGInnovate, an investment arm of the Singapore government managing over US$200m, connects aspiring entrepreneurs with support for business-plan development, sources of funding, and go-to-market efforts.
Through the vast networks of UOB and SGI, The FinLab accelerates the growth of emerging FinTech startups from around the world that have an interest in the Asian markets. Our wide connections mean our startups have unparalleled access to mentorship, resources, and new markets for growth and expansion.
What’s in it for your startup:
- Funding of SGD$30,000 and assistance with grants provided by the Singapore government
- Mentorship and guidance on business model and go-to-market strategy by domain experts from the bank
- Ability to tap on the regional network of partners that The FinLab, UOB, and SG Innovate have
- Connections to business opportunities ranging from large corporates to SMEs
- Opportunities to participate and pitch in leading FinTech conferences and events in Asia
- Tech resources such as cloud hosting, analytics, and other software tools
- Access to network of investors and VCs for further fund-raising
- Introductions to regulators to understand the regulatory framework
- Free coworking space in BASH, located in the heart of Singapore's startup community
- Applications close: 17 March
- Selection days: 10–13 April
- Program starts: 1 May
Watch this space for more press releases regarding our program!
Find out more on our website: www.thefinlab.com.