Month: February 2020

Singapore Budget 2020: US$300M to be set aside for deep tech startups under Startup SG Equity 

The newly released budget for Singapore announced additional support of US$300 million for deep tech startups under Startup SG Equity among US$8.3 billion for economic transformation, according to TodayOnline.

This will include emerging technologies such as biopharma, medtech, advanced manufacturing, and agri-food tech and will help them gain better access to capital, expertise and industry networks.

“As these startups need larger investments and longer gestation periods, and face higher risks, investors are less prepared to invest in them,” Deputy Prime Minister Heng Swee Keat.

The Startup SG programme provides equity investments to tech startups with global market potential and has helped startups launch through co-investment schemes such as Startup SG Equity.

WhatsHalal scores seed investment from crowdfunding platform for regional expansion

Indonesia-based WhatsHalal secured an undisclosed amount of seed funding from FundedHere, a Monetary Authority of Singapore’s (MAS) licensed crowdfunding platform, according to a press release statement.

The startup which provides enterprises decisions and solutions to enter the halal market internationally will use the fresh funds to continue regional expansion and further development of its technology.

“I believe we are only just scratching the surface of how powerful harnessing technology can be for the halal industry. Our platform is not just limited to the halal industry and community and we anticipate huge demand for our services and are ready to aid businesses who are keen to tap into both the domestic and global halal industry,” said Azman Ivan Tan,  CEO of WhatsHalal.

Also Read: 5 ways in which crowdfunding can help your start-up grow

WhatsHalal is currently joined Batch 6 of Plug and Play Indonesia’s innovation programme and was a part of the first batch of startups participating in Tribe Accelerator.

TikTok reportedly considering setting up HQ in Singapore

According to the WallStreet Journal, Chinese Internet giant ByteDance is looking to set up its headquarters outside of China, to distance itself from the ‘Made in China’ image.

A source told the news website that TikTok will be considering Singapore amongst other countries such as London and Dublin.

The company currently has a team of employees in WeWork office and has been speculated to be leasing a 60,000 square feet space in One Raffles Quay, one of the business hubs in Singapore.

Grab conducts joint study with Volocopter to bring air taxis to SEA

Singapore’s leading ride-hailing app Grab announced today that it will be partnering with German company Volocopte to study the prospects of bringing air taxis to SEA.

A Memorandum of Understanding (MOU) has been signed between the two companies to explore the most suitable cities to deploy air taxis and explore joint flight tests.

The first flight test was already held in Singapore over Marina Bay, with the Civil Aviation Authority of Singapore (CAAS).

“Together, we will learn from unprecedented insights into the economic and societal opportunity of launching our services on the hottest routes in the Southeast Asian market,” said Volocopte CEO Florian Reuter.

Credify raises US$1 million in a seed round led by Beenext and Deepcore

Singaporean software development company Credify raises US$1 million in a round led by AI-focused incubator Deepcore and Beenext, according to Tech In Asia.

The proceeds will be used to enhance its product, and further localising its software development operations in Southeast Asia.

According to CyberSource, an average of 1.6 per cent of online revenue is lost to fraud in Southeast Asia and the startup tackles this challenge by providing identity and trust system solutions in e-commerce and lending.

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The tourism sector has today grown to be an integral part of the world’s economy. Tourism currently represents 10 per cent of the world’s GDP and is a substantial global job provider.

There is a big room for growth in Southeast Asia’s tourism, however. Recent statistics predict that the tourism and travel sector in the region will rake in US$222.8 billion by the year 2027 — 5.3 per cent of the total GDP. This means there are a lot of opportunities that could be tapped into. 

A window of opportunity

China has emerged as a high-growth economy not only in the region but the entire world, and it has a substantial share in contributing to the region’s tourism sector growth. As incomes grow, travel and tourism in China are also on the rise, with 166 million individuals travelling to other countries in 2019 alone, and growing at least 11 per cent year-on-year. 

Southeast Asian countries, particularly Thailand, Malaysia, and Singapore, are among the top list of destinations by Chinese travellers, contributing to a steady outflow of tourists, as well as revenues for destination countries.

According to a recent report by the Pacific Asia Travel Association, Southeast Asia destinations expect to see collective receipts from tourism increase from more than US$432 billion in 2018, to around US$670 billion by 2023. Data from Thailand’s Ministry of Tourism and Sports indicate that China is the top country by tourist origin, at 8.52 million Chinese visitors in the first three quarters of 2019 alone, contributing at least THB427 million (US$13.68 million) in that period.

However, even amidst the growing number of travellers within the region to other destinations within Southeast Asia, it is important to note that a substantial part of the population has no adequate access to payment or bank facilities.

Also Read: [Updated] Thai travel tech startup Tourkrub to raise US$5M in Series B funding to support regional expansion plan

Recent statistics show that only 104 million adults of the 400 million are fully banked or have access to financial services, while 198 million of them do not own a bank account at all. 

This largely implies that most transactions are conducted in cash payments, which are obviously costly in terms of forex conversions. In addition, having to travel to multiple destinations with lots of cash in hand comes with the risk of losing money in transit.

Digital payment solutions for travellers

Fintech solutions such as digital payments allow individuals to transact online without having to make direct cash transactions. Solutions such as these are crucial to further growth in the tourism sector in Southeast Asia, and many players in the region have done efforts to integrate digital payments into their platforms.

This includes, for example, hotels, airlines, and travel agencies, which benefit from being able to offer ease-of-payment to customers.

According to a joint study by Google, Temasek, and Bain & Co., digital payments in Asia will reach over US$1 trillion by 2025 — a 500 per cent growth from 2019.

This clearly indicates a shift towards digital transformation in the payments ecosystem, which is geared towards addressing the challenges of the huge unbanked population in the region.

Travel and tourism can be a big use case for such technologies. “The tourism industry is a perfect use case for digital cash and payments in general, as it is very much an international business that involves many different currencies,” says Felix Mago, Co-Founder of Dash NEXT and  Dash Thailand. 

Also Read: Report: Indonesian startups took 70 per cent of travel tech funding in 2019

He adds, “For example, a customer books a trip to Thailand and pays in US Dollars. But the hotel in Thailand receives Thai Baht. Of course, someone has to change the USD to THB and these conversions increase the cost and time for settlements in the background.

By using Dash’s digital payment solutions, money can be transferred within seconds with almost zero fees. So businesses can profit from lower costs and give that advantage to their customers. But this is not all. As tourism is a very competitive industry and not many platforms are accepting digital currency payments yet, businesses can also easily attract new customer segments and, therefore, gain a competitive advantage.”

Travel companies from China can benefit from incorporating digital payments infrastructure, having the most outbound travellers in Asia–especially with apps integrated with blockchain technology. “The Chinese market provides a great opportunity, as the number of digital cash holders and users is constantly increasing,” says Mago.

While there are few other digital payments platforms such as WePay, Dash does not require any middlemen such as banks, which charge high fees (for instance with international transfers). 

For smoother and seamless travels for tourists out of China and within Asia, the importance of facilitating easier payment systems cannot be overemphasised.

Digital payments can be one factor that will transform the sector holistically by catering to the unbanked population and giving them access to financial services that would otherwise have been difficult to obtain.

Also Read: Today’s top tech news: Hong Kong’s TravelFlan raises US$7M in Series A funding round

Kenny Au, Founder, Elevate Ventures and Advisory, also shares in the belief that digital payments hold the key to transformation in the tourism and travel sector, “Southeast Asia has a US$1 trillion dollar opportunity in the traveltech space, and innovative fintech solutions can disrupt the entire industry because of the huge benefits it provides especially for tourists from China.” 

According to a Nielsen study, over 60 per cent of Chinese tourists made payments via mobile worldwide, including popular Southeast Asian countries such as Thailand. “With digital payments, related industries can tap into this market to add value to the travel sector, such as loyalty awards, integration with other tech-driven services, and more,” adds Au.

There is a big opportunity for travel businesses to increase their market share and attract new customers by integrating digital payment solutions. “As a travel business, all you have to do essentially is plug in this new payment solution and you are ready to attract a new group of customers,” says Mago. 

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Gojek Xcelerate’s 3rd edition selects 9 local retail startups to growth-hack

gojek’s accelerator programme Gojek Xcelerate has entered its third season with the appointment of nine retail startups to receive training in growth-hack in collaboration with Digitaraya and others. gojek said that the focus of the programme will be to apply daily consumer innovation and to reach product-market fit.

Among the nine selected startups are baby needs and toys rental marketplace Gigel.id, personalised skin treatments startup Callista, as well as daily smart gadgets provider startup Sugar Technology.

Launched just in September last year, Gojek Xcelerate is said to be gojek’s way to share knowledge as the first decacorn in Indonesia and Asia Pacific through curriculum-based training. It is developed together with other global partners such as McKinsey & Co, UBS Bank, dan Google Developers Launchpad. Its first batch focussed on machine learning startups with five Indonesian startups graduates, followed by a second one focussed on women founders with nine Asia Pacific startups graduates.

Also Read: gojek, Digitaraya launch accelerator programme Gojek Xcelerate

The demo day wrapped up on February 14 with contestants presenting their business models in front of potential investors, VCs, and other partners. The startups also fight for a chance to be integrated into gojek’s platform and ecosystem.

Hong Kong’s crypto trading startup Amber raises US$28M investment from Coinbase, others

Amber, Hong Kong-based cryptocurrency firm that offers services such as providing loans, electronic market trading, financial management, OTC trading, and more to all institutional investors, announced a US$28 million in investment from Coinbase, Pantera Capital, Polychain, Paradigm, and Fenbushi Capital.

As reported by Tron Weekly, Amber started off as Amber AI, a startup built by four Morgan Stanley traders and one Bloomberg engineer in 2015 to trade Chinese Stocks and securities before focussing on only crypto trading in 2017 after finding an arbitrage opportunity. Now, the company has eliminated the element of AI completely.

Unlike the US government, the Hong Kong government does not count cryptocurrency as a security asset, resulting in Amber’s clients’ abilities to trade more than 700 coins on up to 30 crypto exchanges as compared to 30 digital assets in the US.

Amber now has 105 employees in Hong Kong and is in the same leagues as top crypto companies such as Binance of Singapore, Huobi of Beijing, and Bitmex of Hong Kong.

Binance CEO announces company’s application for Singapore’s Crypto Licence

Cryptocurrency trading startup Binance Holdings Ltd., reportedly has applied for an operating license in Singapore under the government’s new payments legislation, as reported by The Edge Markets.

“We submitted the application pretty fast. Binance’s Singapore entity has been in close touch with the local regulators, and they have always been open-minded,” said Binance co-founder and CEO “CZ” Zhao Changpengz.

The Payment Services Act just came into fruition last month as the first regulation for companies handling activities ranging from digital payments to the trading of tokens such as Bitcoin and Ether. The law will also supervisor rights for cybersecurity risks and controls on money laundering and terrorist financing to the Monetary Authority of Singapore.

Also Read: Crypto exchange Binance hacked, loses US$41 million in bitcoin

Tokyo-based crypto exchange operator Liquid Group Inc. and London-based Luno also revealed plans to apply.

Binance also operates in Singapore and is backed by Singapore-based Temasek Holdings Pte.’s VC arm Vertex Venture Holdings Ltd.

Vietnam will be home to two new ride-hailing apps

Vietnam will soon have two new options of local ride-hailing officially operating in the country following the launching preparation of Unicar and ZuumViet, as reported by VN Express.

Unicar is a startup that is based in Vietnam’s central Nghe An province and currently is testing its services in the province’s capital, Vinh Town. Unicar offers car ride-hailing, motorbike ride-hailing, express delivery service, logistics service, and self-drive car rental through its app.

ZuumViet, another ride-hailing startup, offers motorbikes, four-seater and seven-seater cars, and luxury cars.

Right now, Vietnam’s market is dominated by Singapore-based ride-hailing giant Grab. It recently introduced an advance booking service in Hanoi, allowing Grab customers to book rides at least seven days in advance.

Vietnam’s ride-hailing market was the fourth largest in Southeast Asia last year behind Indonesia, Singapore and Thailand, according to a report by Google, Singaporean state-owned holding company Temasek and US management consultancy Bain.

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Image Credit: Gojek Xcelerate

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MealPal changes existing business model, expands operations in Singapore

After making its debut in Singapore in July last year, US-based food subscription startup MealPal decided to expand its operations to approximately 50 hawker stalls on the platform, according to The Vulcan Post. Its newest additions include stalls at Market Street Interim Food Centre, Tanjong Pagar Plaza Market and Timbre+.

The startup will also be shifting its business model to adopt a flexible credit plan like ClassPass, where meals will be available for a range of credit prices instead of having one fixed price.

The company said that “it wants locals to maintain the culture of visiting a hawker centre”.

Currently, MealPal’s services are available across Buona Vista, CBD, Novena and Orchard. It is most prominent across the business hubs making the feature of skipping the queue, valuable for working professionals.

Also Read: Afternoon News Roundup: Cyber-threat analytics platform CYFIRMA secures Series A funding from Z3Partners

Nepalese food delivery platform Foodmandu secures Series B funding

Foodmandu, a Nepalese food delivery platform, has managed to score an undisclosed amount of funding in a Series B round led by Team Ventures, a private investment fund based in Nepal. Team Ventures will have a 20 per cent stake in the startup, according to the company’s press statement.

Founded by Manohar Adhikari in 2010, Foodmandu delivers food from 500 plus restaurants across three cities of Kathmandu Valley through a pool of 200 riders. Unlike popular food delivery apps such as UberEats and Grab, it also delivers fresh vegetables, beverages and cakes from farmers’ markets, wholesalers and leading hotels to consumers.

“We are happy to have this opportunity to invest in a homegrown, new-economy business like Foodmandu and be a part of its future growth,” said Tenzin Gonsar, Founder & CEO of Team Ventures.

Team Ventures have also invested in a number of real estate development projects, a licensed merchant banking company, stock market and also operates its own trading company.

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Image Credit :  Ke Vin

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Indonesian ride-hailing giant gojek has purchased a 4.3 per cent stake at local taxi operator Blue Bird for US$30 million, Bloomberg confirmed.

Citing people with knowledge of the matter, the report confirmed an earlier report which was published in December 2019 that gojek is buying a minority stake in the company.

In a stock exchange filing on February 14, Blue Bird’s parent company PT Pusaka Citra Djokosoetono said that it sold more than 108 million shares at IDR3,800 (US$0.27) apiece. The filing did not identify the buyer.

A representative of gojek and Blue Bird President Director Noni Purnomo declined to comment on the matter.

Also Read: Morning News Roundup: gojek’s accelerator program introduces 3rd batch of retail startups

gojek and Blue Bird has an ongoing partnership that makes the Blue Bird taxi service available on the gojek platform.

Their partnership came with a long history of competition and reconciliation.

When gojek first took its claim to fame in the Indonesian market, it was met with protests by taxi drivers who believe that the service threatened their livelihood.

But in March 2017, the two companies announced the partnership that would see Blue Bird service being available on the gojek platform.

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Malaysian actor and former Venture Partner at 500 Startups Ashraf Sinclair had passed away in Jakarta at 4AM local time, various media reported.

The actor and investor was 40 years old.

According to a Kompas report, the cause of death was heart attack.

Following a successful acting career in Malaysia and Indonesia that began in 2004, Sinclair joined 500 Startups in 2017.

Also Read: Glee Trees raises funding from 500 Startups to take its robotic process automation tech to Indonesia, Vietnam

The appointment was not his first foray into startup investment. In May 2016, together with his wife, singer Bunga Citra Lestari, he took part in a pre-seed investment in concert crowdfunding platform Konsaato. The round was led by Jakarta-based Grupara Inc.

Sinclair had also invested in restaurant chain TGIF Indonesia, and has started restaurants, gyms, content, and production agencies. He had also produced a sold-out solo concert for his wife, which is said to attended by 35,000 people.

More on this story as it develops.

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Angel investment is one of the more popular routes that startups are taking to secure their first external funding, as they come with many advantages.

However, pitching to an angel investor requires its own set of preparation. What are the things you should keep in mind to craft the perfect pitch? What are angel investors looking for?

In order to answer these burning questions for the startup community, e27 sits down with Eddie Ler.

A former World Bank consultant and angel investor, Ler has invested in pre-seed and seed stages of an enterprise and consumer tech startups. In his experience as an angel investor, his portfolio ranges from micro-mobility, sharing economy, SaaS platform, data analytics, and fintech. His investees have subsequently received backing from G7 sovereign wealth fund, listed investments firms, early-stage VCs, and family offices.

He explains the nature of angel investing –and why it can be tough.

Think big but start small

From the perspective of Ler, angel investing is more about backing the founder rather than the business idea. While he looks at the market risk and technical risks, it ultimately boils down to the ability of the founders to think big but start small.

Founders who move fast and demonstrate early traction with a path towards inflexion point will be interesting.

Market risks are all about how the product will fit in the market in the present and the future. Technical risks answer the question of whether the idea can be developed while founder fit refers to whether the founder fits well with the idea.

After making a holistic judgement based on the three risks, the next step is usually taken.

Spotting the “wannabe” entrepreneurs

In Ler’s opinion, a part of angel investing is also about finding the right startup founder. According to him, entrepreneurship is seen as a trend, a “cool thing to do.” What can be more impressive than having the title of founder or co-founder on your business card?

This makes it even more important for angels to distinguish the wannabes from the real deal.

Also Read:  Things startup founders can learn from the 10 most powerful people in the world

“Personally I look at how passionate this individual is, and whether or not he or she has a chip on their shoulder. Or in other words, if they are looking for something to prove. If entrepreneurs chase money, they won’t be successful,” he says.

Other than that, Ler also takes note of a founder’s energy level. This means that it is not the amount of experience that he is looking for in a founder, but rather the curiosity and the wit to enable them to get ahead of competition and trends.

“A 20-year experience does not matter. Tech moves fast,” he asserts.

When asked if the startup team would be an important factor to consider while seeking funding, he replies saying that the team “is never a perfect team during an angel phase.”

Unfair advantage

Eagle-eyed angels are quick to notice whether the founders have an unfair advantage. This means, apart from a great idea and a passionate founder, a startup also needs another factor that can put it ahead of the game.

This unfair advantage is usually in the form of a strong network of connections.

“A lot of times, you can’t put things on a pitch deck. To know about unfair advantages, I usually like to have a conversation with the founder,” Ler continues.

In order to put things into more perspective, he gives us the example of the infamous novel-turned-movie The Lord of the Rings.

“While the wizards, archers and warriors had powerful skills of their own, they could not solve problems all by themselves due to historical reasons. It turned out the small hobbits had the unfair advantage of being neutral, nimble and stealthy which was the missing link. They were uniquely qualified to kick off their epic journey with helpful characters in the story.”

Also Read:  Angel investor Mike Flache shares his tips to begin investing in startups

While Ler makes a clear point that different angels think differently, this is generally how an angel investor would decide if you are the perfect fit for their portfolio.

“You never marry the first person you meet. Just like dating, when you complement each other, you’ll know it,” he ends with a joke.

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Image Credit:  Jonathan Borba

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The technology space in Malaysia is widely perceived to be male-dominated. For years, the gender gap has been quite apparent in the number of female entrepreneurs active in the Malaysian scene. Despite the Malaysian government’s initiatives to address the lack of female participation in the industry, the current situation has not changed much, with only 23 per cent of startup founders in Malaysia being women.

However, some women are beating all odds and standing out in Malaysia’s tech startup scene. At AdEasy, an adtech startup looking to disrupt offline advertising, we are trying to make strides as a women-led tech company in Malaysia.

We started AdEasy in 2017 after spotting a gap in the offline advertising space. We aim to simplify the offline advertising process using the power of online marketplace technology. 

But before we can get into our story, let us have a look at some of the challenges faced by female entrepreneurs in Malaysia and around the world.

Gender-based stereotypes and biases

Being an entrepreneur comes with its own set of challenges, irrespective of gender and other factors. However, women face an additional challenge in surmounting gender-based biases, that pigeonhole female-founders into a gendered subset of fields.

In the UK, according to reports, startups started by women in gender-neutral industries such as advertising and wearables get around 54 per cent less funding than female-founded businesses that cater to women.

In fact, female-founded “gendered” businesses, such as makeup, retail, and fashion get almost 110 per cent of the funding. 

The funding gap

Last year, AdEasy managed to raise US$200,000 from angel investors. We were fortunate to find supportive investors in a challenging market, but we understand that funding can be one of the core obstacles for a female-led startup.

Also Read: Women in tech: A global evaluation

Funding for female founders stalled at 2.2 per cent of VC capital in 2018. The issue deepens in Asia, where women typically receive less financing than men.

Yet, it may not be just that investors are unwilling to fund female-founded startups. Based on a report by the British Business Bank, the proportion of female-led startups that received investment (four per cent) was roughly the same as those who asked for it (five per cent).

The problem, the findings suggest, is not that women are being overlooked for investment — it is that not enough women are coming forward with their ideas. So, why aren’t women asking for funding? After all, it seems that when they do, they do well.

Why do women hesitate to come forward?

From cultural conditioning to conservative life approach, there can be many reasons as to why women hesitate to come forward. In general, there is a tendency for young women to be raised to be overly reluctant to pursue risky ventures.

Furthermore, we tend to be more conservative in our approach to product development. We spend more time developing a business case and prototypes to ensure there is enough or valid reason to expend development resources, as opposed to the traditionally male-oriented, agile “fail fast” methodology that involves developing MVP, releasing it as quickly as possible, then moving on to the next thing.

Another place where the hesitation comes from is the fact that we tend to humanise our investors. We see investments as a sign of trust and honour, and feel responsible to ensure our investors get “paid back”. Eventually, we end up asking for less. 

Lack of role models 

At AdEasy, we believe that another challenge faced by women in tech here is the sheer lack of role models for women. As female influence in tech is relatively new, career blueprints are not as well defined, but things are changing slowly.

Young women now have the likes of Tan Hooi Ling, the co-founder of ride-sharing goliath Grab; Melanie Perkins, CEO and co-founder of Canva; and Ankiti Bose of Zilingo that they can look up to and learn from in the tech space.

Changing times

Despite these challenges, women are starting to thrive in the tech scene here, and their performance is staggering. In top-tier leadership roles, women have shown to perform better than their male counterparts. Last year, Malaysian entrepreneurs Sarah Chen and Joolin Chua made it to the Forbes 30 Under 30 Asia list. 

On the other hand, in the Dell Technologies’ 2019 Women Entrepreneur Cities (WE Cities) Index that ranks 50 global cities on their ability to foster growth for women entrepreneurs, Kuala Lumpur was listed on the 44th position. 

Also read: Women self-promote way less than men. But why?

Finding your feet in a male-dominated industry is never going to be an easy task. But with more women at the forefront of the tech industry, the tide is starting to change. As the barriers to entry continue to diminish, 2020 is becoming an exciting prospect for female entrepreneurs.

We started AdEasy back in 2017 when the female influence in tech was significantly lower. Now, the makeup of the tech industry in Malaysia is beginning to change. 

The Malaysian government is lending a helping hand with initiatives to address gender inequality. They have provided a portal to share best practices and techniques to help working women.

These are significant strides forward in supporting female entrepreneurs. Now, as attitudes change and funding is set to increase, more and more women are coming forward to work in the tech scene. It is safe to say that we are moving in a progressive direction.

While there is still a long way to go, the possibilities for female-led companies in 2020 are endless. 

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page.

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Skymind Global Ventures (SGV), an Artificial Intelligence-focused startup fund-cum-accelerator based in London, is planning to expand to Malaysia and Indonesia in Southeast Asia.

This is part of Skymind’s global expansion plans to focus on training and investment in new AI technologies.

In January, Skymind launched a US$800 million fund to back promising new AI companies and academic research across the UK and globally.

The fund is led by Founder and CEO Shawn Tan. Joining Tan is Skymind Co-founder and Eclipse Deeplearning4j creator, Adam Gibson, as Vice President. Gibson will manage Skymind’s software division Konduit, which delivers and supports Eclipse Deeplearning4j to clients, as well as offers training development.

Also Read: What you need to know about Artificial Intelligence and its compliments to data science

Skymind plans to train up to 200 AI professionals for its operations in London and Europe and eventually expand the programme into Southeast Asia.

The use of AI and industry acceptance has been growing steadily internationally, particularly in Southeast Asia. The region has been identified as one of the target markets for the investment fund, with a significant portion of the US$800 million to be made available to growing the region’s ecosystem.

“SGV sees strong potential in Malaysia and the Southeast Asian region to build a thriving AI ecosystem. From talent to incubating innovative startups, this region requires the tools and expertise to become a global AI hub,” Tan said.

Shawn also believes that Malaysia has a lot of untapped potentials to build AI talent and the ecosystem in terms of partnerships and implementing solutions. SGV will use its London base to back research and development and generate business opportunities across Europe and Asia.

SGV is a dedicated AI ecosystem builder, enabling companies and organisations to launch their AI applications and bring their business cases to life. It provides clients with supported access to Eclipse Deeplearning4j and other open-source tools as well as global capital funding and talent development.

 

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Standing in first place on the scale of the most innovative fintech hubs in the world, Singapore has always taken pride in its forward-thinking culture, with a triumvirate of top-notch human capital, an open economy, and investment in infrastructure, all of which contribute greatly to its position.

Yet, within an increasingly turbulent economic climate, there has been much debate on how Singapore can sustain its dominance as one of the region’s leading financial capitals as it continues to establish its footprint across the global financial ecosystem. 

With increased innovations in digital banking taking place on the ground, the discussion is now on how Singapore can continue to pioneer such developments to remain at the forefront of the industry.

From positioning Singapore as an attractive fintech hub to taking a more progressive albeit granular view in its approach to cryptocurrencies, as opposed to its other regional competitors, to promoting the use of technologies like blockchain, Singapore has put in place multiple plans to stay ahead of the game. 

Tipping the balance scale in innovation

While the push towards open banking has been ongoing for a while now, the past two years have seen accelerated growth in the digital banking sector, with many projects in the pipeline. In order to stay on par and even to further its position from fellow financial heavyweight Hong Kong, the Monetary Authority of Singapore (MAS) has looked to further develop and promote digital banking in Singapore.

Also read: Embracing Singapore’s digital bank shakeup in 2019 and its consequences

After all, to develop a thriving banking community that has both breadth and depth, one has to collaborate with multiple parties in order for the ecosystem to thrive.

With a view to this, Singapore launched the Bank of International Settlements’ (BIS) third innovation hub, following centres in Switzerland and Hong Kong, where the BIS-MAS partnership focuses on a two-pronged strategy of setting up a public digital infrastructure framework and creating a digital platform to link up regulators and solutions providers.

Additionally, efforts by MAS to innovate within the digital banking sector has seen positive results, with MAS providing open-source access to their codes from Project Ubin’s Phase 2, in which the South African Reserve Bank (SARB) employed this shared knowledge to develop Project Khokha. 

A significant talking point as of late is the much-anticipated digital banking licenses with major players such as Alibaba, a Singtel-Grab collaboration, and AMTD’s consortium which includes Xiaomi Finance all wanting a slice of the lucrative pie.

This move by MAS helps to lower the barrier of entry to the banking industry, giving room for non-banks and fintechs to play a larger role in the financial services arena. MAS’ efforts to ride the new wave of innovation through these licenses brought a breath of fresh air to a traditionally restrictive industry, now welcoming a proliferation of non-banking players who can now provide financial products alongside their core business offerings.

While this has perhaps caused some initial trepidation amongst legacy institutions who fear the loss of their dominion, a recent PwC digital banking survey found that 99 per cent of customers will intend to maintain their existing bank accounts rather than making a full transition, with only a reported 33 per cent transitioning to digital banking for their primary account.

Although we’re still months away from the estimated issuance date of the licenses this coming summer, what this shows is that the biggest winners of the day would be the customers. In truth, the digital banking licenses are less about competition and more so about choice, as customers are able to leverage the best of both worlds, combining the cutting-edge technologies of internet companies with the regulatory assurances offered by MAS.

This emphasis on a consumer-focused approach has extended to other countries across the region, with plans in the works by Malaysia’s central bank to issue five online bank licenses, and Bank of Thailand set to introduce more digital banking services to better serve its underbanked population.

Taking a regulatory stand

As Singapore looks to grow its financial ecosystem in the hopes of remaining in pole position across the region, it is also crucial to ensure that the industry is properly regulated so as to anticipate the risks of emerging technologies.

In line with this goal, MAS has laid the foundations through a series of regulations aimed at providing a structured framework for industry players. 

Taking a step forward towards an open banking future, the API (Application Programming Interface) playbook was mapped out, serving as a comprehensive guideline for financial institutions. This has provided a safety net for banks to experiment on API projects in a regulated environment, birthing an API economy. Lauded as the “World’s Best Digital Bank”, DBS inaugurated its Innovation Lab after the API playbook was released which saw the launch of its API developer platform, the largest by a bank anywhere in the world.

Customers are once again, the biggest beneficiaries of the open banking movement, as the introduction of APIs into the traditional banking system not only enables a far more seamless customer banking experience but also greater transparency and access. 

The recently enacted Payment Services Act is another such regulation that MAS has implemented, representing a pivotal step forward when it comes to progressive frameworks for digital assets. Designed to provide guidance and reassurance for companies and consumers in the country, the Payment Services Act addresses one of the most prominent financial innovations seen today, namely cryptocurrencies. With the Act, cryptocurrency firms and exchanges will have the ability to expand their operations in Singapore via applying for operation licenses, while ensuring their operations are MAS-compliant.

With guidelines to operate within, this promotes consumer confidence and trust in the next frontier of digital payments as consumers are reassured by the protection from risks associated with fraud and cybersecurity. As blockchain technology matures, this is an especially timely opportunity for digital payments as further explorations are made into its real-world utility.

It goes without saying that innovation is not without risk. As the finance landscape continuously evolves, institutions and tech companies alike will find themselves having to navigate uncharted waters in a regulatory environment where the pace of change varies greatly from economy to economy. 

As Singapore gradually transitions to a fully cashless society and progressive regulations follow suit to provide the necessary safeguards against the challenges of tomorrow, the future is certainly bright for financial innovation in the Lion City. 

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