Talent, regulatory framework needed to develop S'pore fintech sector, insiders say

Singapore's fintech industry has grown rapidly in recent years. PHOTO: AFP

SINGAPORE -  Singapore is putting together the “Lego blocks” needed to sustain its reputation as a centre for financial technology (fintech) in the region, noted Minister of State for Trade and Industry Alvin Tan on Wednesday (March 23).

Mr Tan, who is also Minister of State for Culture, Community and Youth, cited the signing of several Digital Economy Agreements (DEA) and the country’s participation in a multi-central bank project to make cross-border payments easier as examples of how fintech is evolving here.

"These are the building blocks to our digital economy," he said. "We are piecing these together to raise inter-operability and reduce friction for payment transactions and for digital platforms to work across borders."

His remarks came at the FinTech for Good 2022 event at the 80RR Fintech Hub SG in Robinson Road that raised $120,000 for the NTUC-U Care Fund.

The event involved a panel discussion where participants outlined Singapore's progress in cementing itself as a fintech hub in Asia. They also noted the challenges the industry faces, such as securing talent, improving infrastructure and rolling out appropriate regulation.

It was noted that Singapore's fintech industry has grown rapidly in recent years, with the number of companies rising from 60 in 2015 to approximately 1,400 now, according to the Singapore FinTech Association (SFA).

SFA data also showed that funding for local fintech firms in the first nine months of last year hit a record US$3.5 billion (S$4.75 billion) - three times more than the whole of 2020.

The nation's fintech success stories include the development and widespread take-up of PayNow among both consumers and businesses, said SFA president Shadab Taiyabi.

Another achievement is the establishment of SGFinDex, which lets individuals use their national digital identity to retrieve their personal financial information, a world first.

It is crucial to build a local pool of talent to foster innovation and drive growth if this pace of progress is to be maintained, the panel noted.

"Fintech firms are competing for talent with banks, digital banks as well as technology giants," Mr Taiyabi added.

Manpower Ministry data shows that job vacancies in the technology space grew from 6.6 per cent in Dec 2020 to 10.9 per cent in Dec 2021.

An SFA report in 2021 noted that the fintech workforce in Singapore is estimated to grow by an average of 37.7 per cent, translating to between 3,700 to 3,800 jobs in the next one to two years. There were more than 10,000 people employed in the sector in 2020, the SFA said.

Mr Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore (MAS), said one of the reasons why Singapore has been successful as a fintech centre is its "relentless focus on infrastructure", which has given it a reputation for being willing to continuously upgrade to support more growth and innovation.

Singapore has also maintained a forward-looking regulatory framework, which is key to maintaining trust and credibility in the industry, he added.

Mr Mohanty noted that Singapore's strong regulations on the retail trading of cryptocurrencies, while rigid, is necessary. "This is the most public-facing side that went out of control when issuers and distributors started selling dreams on the crypto space," he said.

However, he noted that the MAS's regulatory stance on crypto exchanges and custodial service providers has been "very open and well regarded". As a result, many crypto companies "have been happy to set up shop here because they trust the regulator".

Mr Taiyabi added that other upcoming fintech developments in Singapore include establishing a buy now, pay later framework and to mitigate risks of consumer over-indebtedness.

Wider access to robo-advisers, or digital wealth management platforms that allow consumers to invest in institutional grade products, is also on the cards.

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