Fintechs that partner banks rather than compete have seen a 138% increase in funding.

Collaborative fintech firms, or those that offer solutions that enhance incumbent banks, are gaining traction in Singapore.

According to UOB Kay Hian, investment in collaborative fintech companies increased 138% as fintechs increasingly view incumbent banks as potential partners.

The other fintech model, competitive firms, which focuses on directly challenging incumbent banks, only saw 23% investment growth.

UOB Kay Hian analyst Jonathan Koh said, "Unlike London and Silicon Valley, Singapore has positioned to support, rather than to undermine, incumbent banks."

Koh added that MAS recognises that banks need to be profitable to support growth in the real economy while unprofitable banks are a potential source of financial instability.