SINGAPORE has charged ahead by inking several fintech partnerships, putting it ahead of other fintech hubs in establishing new ties around the world in this developing niche. This comes amid the overall trend of fintech hubs banding together to find new means of collaboration, as digital services are increasingly borderless and universal in application.
Bob Contri, Deloitte global leader, financial services industry, told The Business Times: "Over the last year, we have seen very positive developments from regulators across Asia and the pace of change has been extremely encouraging. China, South Korea, Hong Kong, Japan, Singapore, Australia and India have all signed international cooperation agreements with other regulators.
"Singapore's MAS has signed more fintech cooperation agreements than other regulatory bodies in the world. Although the tangible outcomes of these agreements largely remain to be seen, cooperation between regulators globally has undeniably become a trend."
WHERE IT ALL BEGAN
Singapore began its international partnerships with UK. In May 2016, the Monetary Authority of Singapore (MAS) signed its "fintech bridge" agreement with the UK's Financial Conduct Authority.
MAS said then that the partnership would support fintech innovators using Singapore as a base for collaboration and as a gateway to other markets in Asia. In just over a year, MAS has cranked out more than ten partnerships with diverse countries and states. Singapore has an agreement with the government of Andhra Pradesh in India, where the growth of digital economy is being boosted by the country's new digital identity programme. MAS has fintech ties to the Latin America region.
MAS has also partnered Abu Dhabi Global Market (ADGM) to provide access for fintechs seeking a path into the Middle East, Africa, and South Asia region.
Ho Kok Yong, Deloitte Southeast Asia leader, said: "(They) present cooperation opportunities . . . to develop and test the application of disruptive technologies like disruptive lead technologies, artificial intelligence and cyber security."
He added that the next and more critical phase of tie-ups could see developments such as economies working together to build common frameworks to share and secure information across boundaries, and to have a common regulatory framework for fintechs wanting to operate in the financial-services industry.
Amid this international focus, Singapore has attracted TransferWise, a fintech unicorn based out of London. And ADGM's first FinTech Abu Dhabi Innovation Challenge attracted four final applicants from Singapore - the most out of 11 finalists.
To add, the Bank of Thailand said in October that Singapore and Thailand were in discussions about connecting their national digital payment systems. This alliance would be the first of its kind in South-east Asia.
In order to facilitate interaction between financial institutions, regulators and startups, the MAS has established a regulatory sandbox which allows businesses to test innovative products, services and business models in a "live" environment.
Deloitte's recent report on fintechs showed that Singapore recorded US$86 million in fintech deals in 2016, slightly behind Japan that recorded US$87 million. To be sure, in Asia, China had the largest amount of fintech deals at US$7.7 billion.
While there are some concerns that Singapore is too small to have a market for fintech, and locals here are not adapting to new fintech as quickly, Mr Ho said that Singapore is still a test bed for disruptive technologies that can be exported to other economies in Asia and globally.
CREATING A NICHE
"With Singapore's Smart Nation initiatives, the embedding of fintechs in Singapore can potentially be expedited by creating a niche for the fintech and innovative technologies in the nation's financial ecosystem - an ecosystem that would . . . include the telcos and other data-centric sectors," said Mr Ho.
As Singapore moves to being a top fintech hub, it should focus on creating a pool of specialists in areas such as engineering and mathematics in addition to entrepreneurial talent, he added. Immigration policies could be made more favourable in the short-term to lure fintech start ups. For the medium to long-term, fintech-oriented academic curriculum such as disruptive technologies and entrepreneurial skills could be introduced at universities and polytechnics, Mr Ho said
Singapore has cranked out more fintech cooperation deals than anywhere else in the world, says Deloitte