The disruptive fintech sector has been growing rapidly across the world. By challenging the age-old domain and operations of traditional banking, fintech has given the world a different, more user-friendly way of banking. Fintech came into being by mixing the two most important spheres that rule the economic development of any country: finance and technology. Thus, with high mobile subscription ultra-high-speed internet infrastructure and a high concentration of banking, insurance, and asset management institutions, makes Singapore the perfect and perhaps the best geography for fintech.
With per capita GDP of $57,714 (approx.), state-of-the-art infrastructure, complete with high-speed internet accessibility, the city-state fulfills all the factors that are crucial for the growth of the fintech sector. The other most important aspect that makes Singapore the perfect platform for this industry is its strong policies and regulations, effective tax incentives, and some dedicated policy initiatives, specifically aimed to boost the fintech industry. Apart from these, a good talent pool of dedicated and talented finance professionals and the availability of funding required for early-stage investment makes Singapore ‘the country’ to witness rapid fintech growth.
Fintech investments in the world’s first smart nation doubled from USD 180 Mn in 2017 to USD 365 Mn in 2018, which placed the country in the top 5 fintech markets based on the funds raised for the growth of this industry in the Asia Pacific region.
The Asia-Pacific region itself saw growth in investment in fintech to the tune of USD 4.3 Bn, as recorded in 2015. This makes the A-Pac the second largest region after North America, in terms of fintech investments.
Now that we know the reasons behind the rapid growth of fintech in Singapore, let’s take a look at the fintech companies that are contributing to this growth.
Finantix services banks, financial advisers, wealth managers, and insurers by digitising their multichannel and multi-device strategies. They offer these financial institutions flexible solutions that the latter can easily integrate into their current infrastructure and implementation strategies.
In March 2018, Finantix acquired SmartFolios, a startup that creates investment tools that are quant-enabled. Using SmartFolios’ knowhow and tools, Finantix created and launched a wealth management platform that features AI coupled with quantitative analysis solutions, to provide real-time insights and analytics to investors and wealth managers.
This company has made the life of individual personal investors way easier. Financial decisions can be hard for individuals with no prior knowledge or understanding of how financial instruments work. BetterTradeOff uses AI along with statistical models to provide users with financial plans that suit their financial goals, based on their current financial health. The fintech solution, Aardviser, provided by this company is flexible and user-friendly. It allows users to feed it with information in the traditional manner from where it digitises the information, runs it through its tools, to provide users with the financial plans perfect for them.
Sqreem features fintech solutions using cutting edge technology that helps them service clients in over 40 countries across 12 industries. This fintech company did not need to have specialised know-how on each of the industry it serves, thanks to the AI technology it has been using. Sqreem’s AI, as it claims, can grasp and process logic, behaviour, and context at scales beyond human capacity or imagination. The AI utilised by Sqreem employs a non-linear pattern recognition technology that uses signals intelligence algorithm. This allows the AI to identify patterns in large amounts of unstructured data irrespective of language or format, as in Big Data. As such, this particular AI platform can identify and ascertain macro behaviour normalcy as against micro-behaviour abnormality when processing large data sets, across platforms.
Accuity is a part of the RELX group which is a global leader in providing B2B content and data. The company’s focus is more on the regulatory part of finance. As such, it provides a range of reg-tech (regulation technology) solutions that are extremely accurate and flexible in helping optimise payments processes. Reg-tech comprises data and innovative software that is designed to control risk and monitor compliance. NRS, Fircosoft, and Bankers Almanac are some of the products and solutions provided by Accuity.
In July 2018, Accuity acquired Safe Banking Systems (SBS). SBS is an enterprise-wide KYC due diligence service provider that seeks to fight money-laundering through its solutions. Their products offer risk assessment screening and false-positive reductions for banks and other FIs.
Bambu is known for its robo-advisor which an AI based solution which can dig out patterns and insights from complicated and unstructured financial data to help create winning investment strategies. Bambu sources its data from Thomson Reuters and DriveWealth. Given its access to AI and easy data-crunching abilities, Bambu is able to provide its wealth management formulations tools at a price much lesser than the prevalent market fees for financial advisors. Its tools and solutions are available to banks and wealth managers, who can now provide better customised and accurate personal finance management tips to their clients, thanks to robo-advisor.
Razer is affiliated with United Overseas Bank (UOB) and is currently looking to carve a niche for itself in cross-border remittance. Currently, the venture is working with Finlab to come up with a proof-of-concept or MVP to test the viability and functionality of cross-border remittance using blockchain technology.
Razer has also launched its own eWallet, RazerPay. Yet another collaboration with NETS group has enabled RazerPay acceptance at all NETS’ POS terminals, thus increasing its market reach, visibility, and usability. Razer was founded in San Francisco, California in 2005 and has dual-headquarters in both San Francisco and Singapore.
While the fintech industry in Singapore is flooded with high-end tools and solutions that are making financing decisions easier and better, fintech lending firms in Singapore also continue to grow.
At the beginning of the year 2019, Malaysian funding company RCE Capital infused millions of dollars into the Singapore fintech scenario. This liquid injection has given a fintech-based lending platform the power to take on traditional banks by lowering interest rates and allowing prompt debt repayment.
As the Singapore fintech scenario continues to develop, we will see beta testing and proofs-of-concept come to life and new-age finance strategies come into play which will make handling this important resource easier.