Singapore is internationally renowned for its forward-thinking in the financial sector, so it should be of little surprise to see many fintech companies setting up in Singapore and the financial technology (fintech) sector booming on our shores.
If you do a little digging, the reason for fintech’s success in Singapore is quite apparent — the Monetary Authority of Singapore (MAS) has pledged S$225 million worth of incentives for fintech companies to operate and grow in Singapore. Better still, a 100,000 square foot fintech innovation hub has been built in the Central Area of Singapore, designed to foster experimentation in the field.
Fintech is no longer a promising upstart and is widely accepted as the next wave of financial services by Singapore’s established traditional finance sector. Banks and other traditional financial service providers see a fintech company in Singapore as a help facilitator rather than a fierce competitor. From the viewpoint of the greater financial sector as a whole, fintech companies help increase transparency and efficiency for all financial services.
It’s clear that the provision of a rich and nourishing environment helps in starting up a fintech company in Singapore of all sizes. To date, more than 40 multinational fintech labs have opened in the city-state, with nearly 500 new fintech startups currently operating in Singapore.
Incorporating a Fintech Company in Singapore vs a Normal Company
Before the disruption of fintech to the traditional financial sector, it was a laborious and complicated process to incorporate a fintech company in Singapore. At the time, this was a major roadblock for fintech companies, but also a bottleneck for the Singapore economy.
Since then, MAS has more than accommodated the shifting tides of financial services in Singapore, through massive reductions in red tape and regulatory hurdles. In an effort to encourage innovation, and to make Singapore the global leader in fintech, MAS created a new fintech regulatory sandbox program for the fintech sector in 2016.
Given the freedom to experiment within this regulatory sandbox, a growing fintech company in Singapore can now work within specific ranges of operation to innovate in the sector.
MAS has allocated the resources to relax any specific regulatory requirements on a case-by-case basis for individual fintech experiments. These regulatory requirements are:
- Reputation Track record Board composition Credit rating Financial soundness Cash balances Asset maintenance requirement Fund solvency and capital adequacy Relative size MAS guidelines, such as technology risk management and outsourcing Licence fees Management experience Minimum paid-up capital Minimum liquid assets
Read more about Singapore Fintech industry at this Rikvin.com blog.