The Asian financial hub is another step closer to its aspiration. It wants to be a world-class Fintech hub. Till it secures its position, it must sustain its momentum.
By Joelyn Chan
In recent years, fintech has been gaining traction and popularity globally. Startups and incumbent firms enter the industry, in hopes of claiming a share of the pie. They challenge the traditional notions of banking services. Simultaneously, they offer greater conveniences to consumers. The focus is turning towards ASEAN. It is home to 639 million people. Going by volume alone, it is a massive untapped market. Its underserved populations hold infinite potential for growth. Singapore is ahead of its peers and all ready to capture any benefits.
Singapore is all set for success
Shortly after the birth of fintech, Singapore has hopped onto the bandwagon. As Asian financial hub, it has to cash in on the overflowing opportunities. It welcomes the financial technology field by offering a haven and friendly policies. Monetary Authority of Singapore (MAS) has not banned or labelled bitcoin as a fraud. Instead, it cautions investors while attempting to formalise some regulations. The adoption of a non-restrictive stance provides fintech with room for growth.
“Technology-related sectors remain a key focus area for Singapore’s future growth. Singapore has seen extremely promising developments in fintech”, said Ong Pang Thye. He is KPMG Singapore managing partner. He later cited blockchain, artificial intelligence and big data as prominent technologies. These advancements in technology did not happen overnight. Singapore’s big bank players are supporting the push for fintech. They are open to collaborations and partnerships with fintech firms.
The financial services sector knows that fintech will be a game-changer. Regardless of size, all players will have to embrace changes such as digitalisation. The industry currently contributes 12% of Singapore’s gross domestic product. This figure may rise further as fintech seeps into all corners of our lives. In Budget 2018, Singapore Institute of Accredited Tax Professionals has proposed 10% tax incentive for the fintech sector. If the government accepts the pitch, businesses will be incentivised to innovate. They will enjoy concessionary tax rate, on top of the current support by MAS. The odds for success will favour fintech businesses greatly.
Achievement of new milestones hints of Singapore’s steady rise as Fintech hub
Singapore recently held the world’s largest fintech festival. It hosted more than 25,000 participants from over 100 countries. This event marks the second year of Singapore Fintech festival. It is a key initiative by MAS and the Association of Banks in Singapore (ABS). Their aim is for Singapore to be a Smart Financial Centre and a transformational FinTech hub. By the looks of the crowd that has doubled, the organisers have inched closer to their goal. The annual festival will go on till year 2020. Global investors are linked up with budding fintech innovators. The community could expect to see a ripple effect in the fintech ecosystem.
Singapore draws strength from fellow ASEAN nations
The small nation is unfazed by possible competition from surrounding nations. Globally, it has signed 16 FinTech cooperation agreements with governments and authorities. It also wants to establish the ASEAN Financial Innovation Network. For developing ASEAN nations, in particular, strength comes from unity. The synergistic and collaborative efforts will accelerate the region’s developments.
Singapore currently holds ASEAN chairmanship. It will use its forte and experiences to link payment systems across ASEAN. It also recognises challenges arising from cybersecurity and other uncertainties. Indeed, cyber risk is a potential stumbling stone. Singapore is not infallible and is susceptible to fraudulent crimes. As more firms go digital, stronger security measures like APIs are crucial. MAS and ABS are developing guidelines for cyber-risk management. MAS and ABS are developing guidelines for cyber-risk management. Biometrics and cyber issues will take center stage. Upcoming fintech events like Money 20/20 Asia will benefit the community. Investors and businesses need to guard against potential pitfalls.
The future potential of fintech is infinite. As Asia’s financial hub, Singapore has to adapt and evolve. Only then, it can stay relevant, sustain its growth trajectory and keep its regional title. It has been making good progress. Singapore – the regional hub for Fintech – is an achievable aspiration.