How Singapore is powering Asia’s fintech boom
By Imran Khan for TechinAsia.com
Singapore is the easiest place in the world to do business. The city-state has been ranked #1 in The World Bank’s Ease of Doing Business study for the last 10 years.
It’s not difficult to see why that is the case: the city has made great strides in positioning itself as a hub, is considered one of the foremost examplesof a smart city (or in this case, a smart nation), and has a ton of initiatives to support its growing startup ecosystem.
The current buzzword is fintech, and Singapore has been hard at work positioning itself as the key city in the region for startups playing in this space. These initiatives start straight from the top, with the government initiating numerous grants and schemes to help develop the tech startup scene. It’s also something corporates have been keen to develop, and UOB’s fintech accelerator, The FinLab, a joint venture between UOB and Infocomm Investments Pte Ltd, is Singapore’s first corporate accelerator.
The program is currently touring several Asian cities to attract fintech startups involved with mobility, payments and collections, big data analytics, and so on, and Jakarta is its first stop on March 7th.
However, Singapore is still way ahead in terms of having a support infrastructure, expertize, and the kind of environment where doing business is just simpler. It’s one of the reasons why Singapore has been poaching Indian startups for years.
Asia plays catch-up
Asia has been surprisingly slow in the uptake of fintech; it has, up till now, been mostly a European and American industry. Companies like Adyen, Worldpay, and Braintree have been leading the way for years.
Global fintech investment hit US$12 billion in 2014, but Asia accounted for only a little over six percent of that. Increasingly, Singapore and Hong Kong have been looking to bridge the gap between them and their Western counterparts, with the Singaporean government committing a US$166 million investment in nurturing the fintec
h ecosystem in Singapore and, by extension, the rest of Southeast Asia. It’s a space that the country is looking to lead, rather than follow.
Tech in Asia recently commented on “the end of Singapore Inc.” and how the country has been positioning itself to withstand potential disruptions to its traditional industries. With the finance and insurance industry making up 12.5 percent of Singapore’s GDP in 2014, fintech is something the country takes very seriously.
Compare this with neighboring Indonesia’s more arbitrary approach to startups and tech in general. Netflix’s recent global launch was stalled, and even more surprising was the recentban on transportation apps, and then Tumblr, decisions that were quickly reversed. But it’s this sort of inconsistency that most countries – not just Indonesia – suffer from that makes life difficult for startups, especially those that are disrupting a traditional industry. And finance is about as traditional as they come.
The only way is up
Despite the perceived difficulties that Indonesia has legislatively, the strengths are far too crucial to ignore; the country has a growing urban population with a young median age, and a rapidly expanding smartphone market. So obvious are the benefits of supporting the ecosystem that the Chairman of the Financial Services Authority of Indonesia (OJK), Muliaman Hadad, recently shared his views on increasing fintech growth’s trajectory in Indonesia.
“OJK’s function is not just to monitor, but also to encourage and accelerate the availability of wider financial access for all Indonesians, so that the financial industry becomes more inclusive. We are looking for breakthroughs.”
How this manifests itself is yet to be seen. In the meantime, Singapore isn’t standing still. Organizations like the Singapore FinTech Consortium are working with local fintech startups to build and grow the industry. Europe’s Startup Bootcamp FinTech opened in Singapore last year, and they are in the process of launching their program on April 18.
Banks have launched their own incubators, and 10 of the top 15 most funded fintech startups in Southeast Asia come from Singapore. While several Indonesian startups like Jojonomic,CekAja, and Veryfund are beginning to gain traction in Indonesia, Singapore boasts its own homegrown fintech heroes like Tradehero and Fastacash. With an investment of US$797 million in Asian fintech in 2014, Asia, and particularly Singapore, looks poised to lead the way in fintech for the world.
The FinLab is a Singaporean corporate accelerator for fintech startups. As an initiative by UOB, Asia’s leading bank with over 500 offices in 19 countries, it is looking for interesting startups in risk management, wealth management, mobile solutions (including payments and collections, and SME banking solutions) as well as encryption and cyber-security, big data analytics, and blockchain applications. Startups selected into its program will have access to skill, domain and community mentors, analytics support, and benefits from UOB’s legacy and parentage.
If your startup fits into one or more of the areas above, please go tohttp://www.thefinlab.com to put in your application now. Applications will close on March 18, 2016. Only the top 10-12 startups from the region will be invited to join our program starting May 2, 2016.