The report was launched yesterday by Mr Chan Chun Sing, Minister for Trade and Industry, at FinTech For Good 2020, organised as part of the Singapore FinTech Festival 2020.

At the event, SFA recognised the contributions of its individual and corporate members, who collectively donated S$100,000 to the NTUC-U Care Fund, under the FinTech for Good initiative. Led by SFA, in partnership with NTUC, the initiative lends support to various initiatives under the U Care Fund, which provides financial assistance to lower-income NTUC union members and their families. This is the first time SFA and U Care Fund have come together for such an initiative.

‘Singapore FinTech Landscape 2020 And Beyond’: Key Findings

The FinTech community in Singapore has grown rapidly in the last five years together with the adoption of FinTech by traditional Financial Institutions, as they have sought means to innovate and transform. FinTech funding has risen steadily to fuel this growth.

● Interestingly, in 2020, Singapore has demonstrated resilience amidst the Covid-19 pandemic. Despite an initial decline in funding (49 per cent decline in Q1 2020 vs. Q4 2019), Singapore’s FinTech investments have since rebounded to US$278mn in Q2 2020, more than thrice the investments in Q1 2020. Investors are recognising the opportunities existing in Southeast Asia.

● We continue to see FinTechs invest in areas of financial inclusion (Payments, Lending, etc.). The diversity of FinTechs and their business models in Singapore has also broadened significantly with emerging sub-sectors such as RegTech and Data Analytics. More importantly, FinTechs are leveraging on Singapore as a launchpad into the rest of Southeast Asia – providing an opportunity to access more than 650mn people in the region.

Singapore has a strong ecosystem of players who recognise the benefits that FinTechs can bring. The key enablers that have contributed to Singapore’s success include innovation focused investors, a close-knit network of corporates, banks and partners, as well as progressive government and industry associations.

● Private-sector funding has been important for the growth of Singapore’s FinTech ecosystem. From 2015 to 2019, approximately 65 per cent of the FinTech funding in Southeast Asia was directed to businesses in Singapore, close to four times more than the funding received by the next-largest market. While there are fewer local funds focused on later-stage investments, as the sector progresses, Singapore FinTechs will increasingly gain access and be connected to a wider pool of global investors.

● The Monetary Authority of Singapore (MAS) has embraced digital innovation, being one of the first markets in the region to launch various initiatives such as the Electronics Transaction Act and a unified digital identity. This further extends to include relevant industry associations having a conscious view to support FinTechs such as through the Startup SG Programme by Enterprise Singapore and the FinTech Talent Programme by SFA. Singapore’s openness to digital initiatives across both the public and private sectors allows business models and workflows to be incubated and tested here in a way that would not be feasible elsewhere.

● Having a strong network of partners further reinforces Singapore’s proposition as an ideal hotbed for B2B FinTechs to test their ideas. FinTechs in Singapore are focussed on a multi-country strategy with a strong appetite for overseas expansion. From SFA-OW FinTech survey 2020, 95 per cent of FinTechs have plans to expand overseas. A key challenge that many FinTechs face when expanding abroad is the heterogenous regulatory environment. Recognising this, there has been more emphasis on creating a coordinated approach for the region in recent years through cross-border collaborations.

The FinTech industry’s growth trajectory has been impressive to date. To establish Singapore as a regional FinTech hub that stays on the path to be a global hub, key factors that have contributed to Singapore’s success to date need to be continuously adapted to stay relevant.