All the key strengths and weaknesses of the fintech capital of South East Asia

Source: Getty.

The city-state of Singapore accounted for three quarters of Southeast Asia’s fintech funding, half of the deals, and three of the top five deals by value in 2016, and it continues to be a leader today.

It comes down to several factors, including that the Monetary Authority of Singapore (MAS), Singapore’s central bank and financial regulator, has shown strong support for the industry. MAS has made the setting up of fintech businesses easier and more efficient by creating a Fintech Office, providing grants to startups, and creating a sandbox where fintechs can test new technologies, among other initiatives. In addition, international fintechs in Singapore are able to register with two local agents to act on their behalf. Meanwhile, the majority of the population has access to 3G/4G and are subscribed to the internet, meaning the market is primed for digital services. With all of these factors in its favor, Singapore is likely to continues as a globally recognized fintech hub over the next few years.

Singapore’s Fintech Strengths

Regulatory support

Straightforward, fintech-specific regulation is one of Singapore’s biggest strengths, especially as many other countries in Asia-Pacific (APAC) have more complicated regimes. MAS boasts a virtual Fintech Office, launched in collaboration with the National Research Foundation (NRF) in May 2016, which develops funding schemes, identifies gaps in regulatory oversight and ways to bridge them, and manages the marketing of Singapore as a fintech hub. Additionally, MAS recently proposed making it easier for firms to offer digital advice to retail investors through updated legislation, and supports Singapore’s fintech festival, first held in November 2016. Moreover, the regulator has formed fintech agreements with a number of other countries, facilitating information sharing and collaboration with international fintechs and regulators. These initiatives demonstrate MAS’ commitment to making Singapore a place where both domestic and international fintechs can develop and thrive — and its efforts seem to be paying off, as indicated by UK fintech TransferWise’s recent decision to establish an office in the city-state.

Fintech sandbox

MAS has published guidelines for the utilization of its sandbox to facilitate a smooth application process. The facility is a major advantage for fintechs in Singapore because it allows them to develop new technologies that may not fit into the existing regulatory framework, thereby encouraging experiments and preventing regulatory concerns from suppressing innovation. The sandbox ensures appropriate measures are taken to contain any consequences of failure and maintain the overall safety of the financial system. If a company’s testing leads to a successful new technology, it’s then required to comply with any relevant legal and regulatory requirements to be able to launch. In contrast to the UK, the first country to launch a sandbox, Singapore’s accepts applications on a rolling basis with a response time of 21 days. This may make Singapore’s sandbox more attractive for fintechs, since they won’t have to wait for a window to open to apply. Additionally, any new technology emerging from Singapore’s sandbox must be deployed in Singapore upon exit. This ensures the city-state will benefit from the newly developed technologies, and prevents the sandbox from being taken advantage of by companies from other countries.


Singapore’s population is relatively advanced when it comes to tech adoption, and the city-state is ranked number one in the Network Readiness Index, which measures the propensity of countries to adopt new information and communication technology solutions. Additionally, 95% of the population uses a smartphone, and debit and credit card inclusion is high, illustrating Singaporeans’ comfort with electronic payment methods. Eighty-nine percent of the population uses the internet on a digital device for banking and finance more than monthly, while 12% do so on a daily basis. This is very good news for consumer-facing fintechs, as the market seems primed to accept new fintech solutions, and consequently, willing to adopt them. Additionally, Singapore uses English in business dealings, distinguishing it from many of its regional competitors. This could prove particularly helpful in encouraging international fintechs to enter Singapore, as it enables a smoother transfer. Singaporean law also has its roots in English law, which can further facilitate launching operations in Singapore, especially for international companies. These features create an environment in which fintechs can grow more easily and establish themselves.

Notable Singaporean Fintechs


After graduating from Startupbootcamp Fintech Singapore’s second cohort last year, insurtech PolicyPal was the first to receive approval from MAS to enter its sandbox. It will finish its six-month testing period at the end of August 2017. Additionally, in March this of year, PolicyPal secured an undisclosed amount of funding in a Seed round led by 500 Startups. In partnership with a variety of insurance companies including Aviva and Etiqa, the insurtech aims to provide a simple way for consumers to buy and manage insurance policies. Users are guided through the process of buying a new insurance policy with the app’s chatbot, Kate. Given that PolicyPal has had time to experiment with new technologies via MAS’ sandbox, and likely has capital available to support it for a while yet, it stands a fair chance of building out a robust portfolio of offerings. Moreover, its stint in the sandbox could push it ahead of other insurtechs by helping it get regulated faster for new services developed in the testing period.


QUOINE provides cryptocurrency trading and exchange solutions, as well as other financial services, powered by blockchain technology. It’s headquartered Singapore, though it also has offices in Japan and Vietnam. QUOINE received $20 million in funding in 2016, in the highest-valued deal in Southeast Asia in that year. Currently, QUOINE is only web-based, but it has plans to expand its services via mobile apps for both iOS and Android users. Most recently, in June 2017, QUOINE launched a new crypto-to-crypto only platform, called QRYPTOS, in a beta desktop version. The aim of this launch is to make cryptocurrency trading convenient and efficient for everyone from retail investors to corporate clients. The company is likely using its 2016 funding to develop the new products and expand its services to mobile apps. This, in turn, will help QUOINE to reach more users and further establish itself.

Singapore’s Fintech Challenges

Population size

With a population of 5.7 million, Singapore is significantly smaller than many of its fintech hub rivals. That means startups in Singapore have a smaller population to address, making it harder to establish their technologies in this competitive market. This will be a constant issue for startups in Singapore. However, with its fintech agreements, Singapore is attempting to make expansion to other markets easier for startups.

Regional competition

Singapore is facing a lot of competition in APAC from other locations vying to the be the region’s leading hub, including Hong Kong and Shenzhen. That means investors have a variety of options in APAC when it comes to backing fintechs, and many other regions are are also attractive to investors. For now, its supportive regulatory regime is a major advantage, especially compared with Hong Kong, where fintechs have previously complained about a lack of support. But Hong Kong, and other contenders, are likely to soon see the benefits brought by MAS’ approach and introduce similar regulation. That means Singapore should not ignore the competition if it wants to become a global fintech hub. Potentially, the city-state could differentiate by promoting itself as a gateway into other markets in Southeast Asia.

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