MAS commits $250m to boost innovation, tech in financial sector

Funds will be invested over next 3 years under enhanced scheme

The Monetary Authority of Singapore (MAS) is stepping up its support for fintech here.

It will commit $250 million in the second edition of a scheme to speed up technology adoption and innovation-driven growth in the local financial sector.

MAS also aims to strengthen support for large-scale innovation projects, and build a stronger pipeline of Singaporean fintech talent.

The amount will be invested over the next three years under the enhanced Financial Sector Technology and Innovation Scheme (FSTI 2.0), MAS managing director Ravi Menon announced yesterday.

The funding has been ramped up from the $225 million spread over five years that was injected under the original FSTI scheme, launched in 2015, with a vision of making Singapore a Smart Financial Centre.

Under the enhanced scheme, the MAS will double the maximum funding amount, from $200,000 to $400,000, under the Proof-of-Concept Grant, and will increase the maximum funding support from 50 per cent to 70 per cent of qualifying project cost, the authority said in a separate statement.

A merit-based tiered funding mechanism will be introduced to replace the existing flat 50 per cent funding support of qualifying project cost.

The level of funding support and quantum cap for each applicant will vary according to the total number of favourable votes awarded by an evaluation panel.

Funded by the Financial Sector Development Fund, the latest initiative aims to invigorate the culture of innovation in Singapore and deepen the cyber-security capabilities in the financial sector.

Mr Menon said: "We have made good progress towards our vision of a Smart Financial Centre. Singapore is consistently ranked among the top three or five fintech hubs."

Singapore now hosts 40 innovation labs, compared with hardly any five years ago. These labs have embarked on close to 500 projects.

Mr Menon said the innovation labs MAS funded so far created 180 high-value jobs, of which about 60 per cent are held by Singaporeans.

"More than that, there is valuable learning and capability transfer, helping to build our local talent pool and pipeline for future leadership roles," he said.

Beyond the labs, the digital transformation across financial institutions here has opened up jobs for many more people across areas such as cloud computing, data science, blockchain, digital marketing and cyber security.

These jobs account for a good part of the 22,000 net jobs the financial sector created between 2016 and last year.

 
 

Meanwhile, MAS estimates there are nearly 10,000 people employed by fintech firms, many of which are also classified as part of the financial services sector.

Highlighting the exponential growth of the fintech start-up community here, Mr Menon said Singapore now has 1,000 fintech firms, compared with about 50 five years ago.

Last year, fintech firms attracted a record $1 billion of investment. Even during the first half of this year, marred by the pandemic, the sector continued to attract equity funding and mergers and acquisitions amounting to $650 million.

The central bank is also ramping up support. It said it will raise the maximum funding quantum for all qualifying artificial intelligence projects under the Artificial Intelligence and Data Analytics (AIDA) Grant from $1 million to $1.5 million.

Furthermore, all new projects under the Financial Institution-Level Projects, Industry-Wide Projects and AIDA Tracks will now qualify for funding support for capability transfer-related training costs.

Such training costs include expenses incurred to engage specialists to train the local talent pool, and expenses incurred to send local employees for overseas training.

These training programmes will help to support workforce transformation in the financial sector and to accelerate skills and knowledge transfer to Singaporean talents.

A version of this article appeared in the print edition of The Straits Times on August 14, 2020, with the headline 'MAS commits $250m to boost innovation, tech in financial sector'. Print Edition | Subscribe