Singapore has been a remarkable success story in economic development, transforming itself into one of the most developed economies in the world. But what is its fintech ecosystem like?
As a member of the Association of Southeast Asian Nations (ASEAN), Singapore is not only a regional hub in Asia but arguably a global one as well. This is especially evident in financial services, where it now ranks as the most important financial hub in Asia, overtaking Hong Kong, and ranks third globally behind London and New York City, according to the Global Financial Services Index.
Singapore’s economic success can be attributed to the creation of a diverse economy, which has been crucial given its limited space and natural resources. Key sectors include financial services and transportation, and in recent years, the country has been actively developing and fostering its tech and digital sectors, including fintech.
Singapore insights
The success of Singapore’s current fintech ecosystem largely traces back to 2015, when the Monetary Authority of Singapore (MAS) introduced the Financial Sector Technology and Innovation (FSTI) Scheme.
MAS committed a total of $225million to the FSTI for a period of five years. The scheme’s success is evident in the fact that, between 2015 and 2020, over 200 financial institutions and fintech companies tapped into the initiative to embark on innovation projects within the financial services sector.
MAS has also been proactive in implementing regulations across various fintech subsectors, aligning with the country’s approach to maintaining stability, attracting foreign investment and business, and fostering innovation and talent.
Estimates suggest that Singapore now hosts more than 1,600 fintech companies, the highest number in the ASEAN region. Remarkably, considering the country’s small size, Singapore rivals other key players globally, such as the UK and the United States, in terms of fintechs per capita.
Among these fintech companies, the leading subsectors are payments (with nearly a third, or 31 per cent, of all fintechs in Singapore belonging to this category), fintech infrastructure providers (18 per cent of total fintechs), and regulatory technology (17 per cent). In terms of specific sub-verticals, the leading areas are money transfer and remittances (with around 40 companies), online payment gateways (around 40 fintechs), and mobile wallets (around 24 companies).
Supporting fintech
Fintech is so important to Singapore that the government continues to actively support its growth. The Financial Sector Technology and Innovation (FSTI) initiative is now in its third round with FSTI 3.0, launched in August of last year. This phase is providing S$150 billion over the next three years, focusing on areas such as environmental, social, and governance (ESG) initiatives, promoting the adoption of artificial intelligence (AI) and data analytics (AIDA) among smaller financial firms, and supporting less digitally mature firms in acquiring regtech solutions.
The fintech sector in Singapore has also grown organically. Nium, Thunes and Aspire, some of the country’s most prominent fintech companies, have established their headquarters in Singapore. Moreover, many non-Singaporean fintechs choose Singapore as their regional base, not just for Southeast Asia but for the entire Asia-Pacific region.
This trend is similar to what has been seen in other sectors, like financial services, where Singapore has successfully attracted foreign direct investment (FDI). Nearly half of all Asian regional headquarters are based in Singapore, including global giants like Microsoft, Google, FedEx, Rolls-Royce and Visa. Notably, Visa has established its Visa Innovation Centre in Singapore, one of only a few such centres worldwide, with others located in cities like in Dubai, Nairobi, San Francisco, Mexico City, London, Beijing and Riyadh.
Initiatives
QR payments are popular throughout Southeast Asia, and Singapore has seen significant growth in their usage. In 2021, an estimated 34 per cent of adult consumers in Singapore used QR payments.
One of Singapore’s most successful fintech initiatives is the annual Singapore Fintech Festival (SFF). Many in the industry consider it to be the leading fintech trade show globally. Last year’s event broke records, attracting over 66,000 visitors.
Key organisations supporting Singapore’s fintech ecosystem include the Singapore Fintech Association, a cross-industry non-profit founded in 2016 to promote the sector. In the broader startup and tech landscape, Singapore hosts at least 300 accelerators and incubator programmes. The country is home to over 4,000 tech startups and consistently ranks among the top 10 countries in the Global Innovation Index.
Overall, Singapore is set to continue its impressive economic development, with sectors like fintech driving growth and innovation across ASEAN, Asia, and on the global stage.
The post Spotlight on Singapore: A Fintech Powerhouse Fuelling Innovation in Asia appeared first on The Fintech Times.
