The Story of Singapore FinTech: a Practical Guide to Growing a Sane FinTech Ecosystem (Part 1)

It is just recently that the third edition of the Singapore FinTech Festival (SFF) took place. It welcomed about 40,000 participants from all around the world, becoming the biggest annual gathering of worldwide FinTech community representatives. It is important to remember that it wasn’t always that way and there were immense efforts applied for the big goals to be reached.

Singapore began its path towards becoming one of the global FinTech leaders in 2015. Back then the main aim was to create a Smart Financial Centre, where innovation and technology would merge and bring prior unimaginable results. It was important to learn how to increase the overall level of efficiency, as well as to organize a better risk management system. All of the new opportunities that were opening were groundbreaking enough to change the lives of millions.

Think of a world, where financial services are built specifically around the daily needs of people in this sphere. It might be difficult, yet possible to create a society where there are no identity cards and no passwords, as well as no complications that those bring along. You might think that this could only be reality in a utopian scenario, but with the advances in biometrics, identity is increasingly becoming human. Numerous banks have introduced the opportunity to use FaceID instead of the banking passwords, which can be so easily forgotten. For instance, the OCBC Bank in Singapore is already offering this to its clients.

Think of a world, where payments have a completely different form – they are simply invisible. Meaning, there is no longer a need to physically go through the process of paying for the purchased goods. Instead, cameras and sensors can identify your personality and the items you are picking up while shopping. This way you are able to walk out of the store straight after you have completed your checklist without loosing time at the cashier desk. All the difficulties with cash, cards, long queues are already being reconsidered with such solutions as Amazon Go.

Continuing the topic, in Singapore insurance policies are increasingly being subject to major revisions. Payouts become automatic, which frees you from the burden of going through all the struggle with documentation in crisis situations. MetLife’s Lumenlab in Singapore has already created such solutions for gestational diabetes insurance. The MAS’ regulatory sandbox in turn allows for the solution to be tested in real-life scenario within a friendly regulatory ecosystem.

Many people also struggle with complex and accurate financial advice. Wouldn’t it be amazing to carry a personal financial dashboard around with you on a mobile device? This would allow for a holistic approach towards managing one’s finances, as all of the individual data would be automatically retrieved from relevant banking institutions, insurance companies and broker-dealers that coordinate investments. Pensions, social security funds, taxes, mortgages and any other financial liabilities would all be analyzed within a single system, and included into a personal balance sheet. In developed FinTech hubs it is believed that financial advice must be developed in accordance with an integrated view on personal circumstances and other related nuances. This is why developers are concentrated on creating apps that would move humanity forward in this regard.

In simpler words, the financial network of the future is aimed at resembling the financial ecosystem that Singapore has been working on establishing: invisible, with individual solutions, and increased simplicity and user-friendliness.

Singapore has made giant steps towards a solid FinTech ecosystem in the recent few years. However, the jurisdiction, just like numerous others, still lacks common standards, interoperability and open architecture that would shrink down the existing limits. The government has to collaborate with the actors of the financial industry, research institutions, and the FinTech community as a whole. This approach would fuel the development and spread of ideas and knowledge, giving the industry an intense boost. Nevertheless, the private and public sectors of Singapore have been putting significant efforts into working together and making steps towards the financial ecosystem of the future.
Below are the six key dimensions that allegedly have the largest significance:

  1. Human capital – FinTech is mainly built on the skills and energy of the people who are part of it.
  2. Identification – identifying the general pool and individual customers separately is the basis for developing FinTech in the best practices.
  3. Payment mechanisms – fast and secure payments are the core element needed for the creation of a stable digital economic climate.
  4. Data protection – it is fundamentally important to protect the collected, transmitted and stored data in order to create an environment of trust and reliability.
  5. Daily application – FinTech must focus on creating solutions for the problems that exist in the real world and that people face on a daily basis. Solving actual problems and helping the global society get rid of parasitic issues should be the key goal of the industry.
  6. Common efforts – effective mechanisms must be put in place in order to promote cooperation between all the actors involved in the field, which will facilitate the growth of the industry and contribute to its future success.

In this article we have introduced the background of FinTech in Singapore and the global significance of the growth and development of the industry. In the Part 2 you will be able to learn more about how to operate with the six key dimensions in order to create an advantageous FinTech environment on the example of Singapore.