Why choose Singapore as a base for your FinTech operations?
Why choose Singapore as a base for your FinTech operations? In recent years, Singapore saw a spike in the number of aspiring FinTech start-ups as well as global FinTech players flocking to our home ground to start their very own operations. Singapore, being a renowned business, logistics, and financial hub in Asia, the island nation is fast cementing its role as a global FinTech leader. In the short span of five years, the Singapore government has developed a comprehensive support system to promote growth in the FinTech and Digital Asset sectors. The number of entrants in the FinTech industry continues to soar higher, citing an increase from 100 entities in 2015 to more than 1000 new firms in 2020. Being one of the top FinTech hubs, Singapore is now home to 40% of South-east Asia’s FinTech firms. Are you a FinTech entrepreneur who is taking charge of making strategic expansion decisions? Here are some factors that have made Singapore a fertile ground for FinTech. Following the decision to set up an operation in Singapore, partner up with a FinTech-specialised staffing agency to harness the power of FinTech professionals in Singapore. Financial support Singapore’s FinTech market has enjoyed extensive financial support from both corporate and public sectors. Public A key supporter in the public sector is the country’s central bank, the Monetary Authority of Singapore (MAS). Spearheading robust incentives for FinTech companies, MAS announced the launch of S$225 mil (US$158 mil) investment that will be fulfilled by the end of 2020. Even with the economic crisis brought on by the Covid-19 pandemic, Singapore’s FinTech growth remains steadfast as MAS rolled out the FinTech Solidarity Grant of S$6 mil to support Singapore-based FinTech firms. Under the new grant, FinTech companies can apply for a one-time SG$20,000 grant to cover their daily working capital expenses, such as salaries and rental fees. This provides organisations with additional financial bandwidth to sustain their operations amid the challenging business climate. FinTech companies also enjoy concessionary 10% tax incentives on top of current support schemes offered by MAS. Besides these mentioned monetary incentives, there are also many other available grants that FinTech companies can look to tap on in Singapore. More importantly, it conveys the government’s stand and determination in transforming Singapore into a global FinTech hub which brings good tidings to FinTech firms in Singapore. Private There is a wide availability of capital for early-stage investment in the private sectors. Besides government entities, funding is also largely supported by an angel, venture capital, and corporate venture divisions. In 2017, Asia experienced a decline in overall FinTech funding. However, Singapore’s investment in the FinTech space received the largest amount of funding across a single year, with US$229.10 million worth of investment. FinTech companies looking to set up an operation in Singapore enjoy strong financial support from the government as well as great opportunities in getting business funding from the private sector. With sufficient working capital, it ensures that the company’s financial health stays in the pink and businesses are able to fulfill their growth ambitions. Government policies On top of financial support, the Singapore government has also rolled out a slew of initiatives to strengthen the FinTech ecosystem. One of such activities includes the development of sandboxes where financial institutions can test the viability of their financial technology products and services in a cost-effective controlled environment and within a well-defined space and duration. MAS has also launched a platform called Looking Glass, where it encourages and supports networking amongst the FinTech community, creating more opportunities for collaboration and co-creation. There are many other accelerator programs in Singapore that seek to boost FinTech start-ups, often providing entrepreneurship workshops, business networks, and all-rounded mentorship. Initiatives are made available across the whole life cycle of FinTech start-ups, paving the way to success for these budding businesses. Tech literacy Digitalization is the future as it has brought about many conveniences and ease. As a result, digital technologies are becoming an integral part of Singapore’s society today. In line with the government’s effort to strengthen digital literacy in Singapore, the population is becoming increasingly more tech-savvy. With a high rate of tech literacy, it implies that consumers today are ready to accept new technology innovations. This gives FinTech companies the stamp of surety for the industry to gauge demand and grow further. Supportive finance sector The success of the FinTech landscape is also largely dependent on the readiness and receptiveness of the finance sector of a country. Although the finance sector is known to be slow in accepting changes, the banks and financial service providers in Singapore have since come to accept FinTech companies as supportive enablers. Undoubtedly, the rise of FinTech has brought about an increase in efficiency, ease, and accountability of core financial service offerings. This has led to the change in consumers’ preferences and demands, putting pressure on large conventional banks to adopt and incorporate FinTech in their services. As such, the finance sector in Singapore has been extremely forthcoming in helping the FinTech industry in Singapore burgeon by collaborating with FinTech firms to digitalised traditional processes. Today, financial firms in Singapore, enjoy cost savings with the incorporation of FinTech in their service offerings. With digitised services, cost reduction comes in many forms, which includes cutting down on the cost of underwriting and the risk of failure of repayment. Banks and financial institutes are also able to expand their market to provide customized services that serve small businesses and individuals. With large financial institutes coming on board, it plays a major role in driving Singapore’s FinTech growth. Talents Although Singapore is competing on a tight FinTech talent market, it is largely attributed to the surge in the number of FinTech entrants in recent years. With the issue of the talent shortage in the FinTech sector, it puts further pressure on the government to push out strategies to increase the supply of talents and nurture more FinTech professionals. This also shows that the Singaporean talent pool has proven itself