Five Pivotal Fintech Developments that Marked Singapore in 2020

Singapore's Fintech Boom: A Look at the Latest Developments

In the bustling city-state of Singapore, the fintech industry is experiencing a significant surge, with new regulations, digital banks, and support packages driving growth.

Regulatory Changes

The Monetary Authority of Singapore (MAS) proposed new regulations in July, expanding its supervisory powers in areas such as enforcement action against individuals, licensing requirements for virtual asset service providers, and technology risk management. These changes aim to strengthen the regulatory framework and foster a conducive environment for fintech innovation.

Digital Banks

Two digital banks were unveiled in Singapore in 2020, with Sea Group and Grab receiving the first licenses to operate. The Grab-Singtel consortium and Sea were granted digital full banking licenses, allowing them to offer retail customer services such as account opening, deposits, debit and credit cards, and serve corporate customers. All four digital banks are expected to go live by early 2022.

Support Packages

During the pandemic, the MAS launched two major support packages for fintech startups. One of these packages, the MAS-SFA-AMTD Fintech Solidarity Grant, was launched in partnership with the Securities Investors Association (Singapore) and the AMTD Foundation. These support packages aim to help fintech firms navigate the challenges posed by the pandemic.

Fintech Adoption

Despite global turbulences caused by COVID-19, the Singapore fintech industry remained resilient. In fact, 66% of Singaporean fintechs saw an increase in demand during the pandemic, and 40% believe the increase is likely to be sustained. Fintech adoption is projected to increase in the near future, with about 73% of Singaporean businesses expecting to use at least one fintech product or service within the next 12 months.

Blockchain and Green Finance

At the annual Singapore Fintech Festival (SFF), MAS stressed its commitment towards blockchain, green finance, and open banking. The SFF 2020 also saw the launch of Project Greenprint, a new tech platform connecting SMEs and fintech companies working on green and sustainable projects to financial institutions and investors.

SGFinDex and MyMoneySense

Leveraging SGFinDex, Singaporeans can consolidate all of their finances through financial planning services offered by financial institutions as well as through MyMoneySense, a free financial planning digital service offered by the Singapore government.

Funding and Regulations

Fintech funding declined to $68 million in Q1 2020 but significantly rebounded in Q2 2020 to reach $278 million. The Payment Services Act, which came into force on January 28, 2020, provides a single, activity-based, and risk-specific legislation for payment-related services in Singapore. The new law consolidates existing payments regulatory frameworks and introduces new types of licensable payment services, including a licensing regime for digital asset exchanges and platforms.

In conclusion, Singapore's fintech industry is thriving, with new digital banks, supportive regulations, and resilient fintech companies driving growth. As the city-state continues to invest in fintech, we can expect to see even more exciting developments in the future.