Fintech is booming in Singapore, a city known for being a global financial hub. The island city-state has received the lion’s share of funding in Southeast Asia over the past five years, and funding has only increased exponentially.

In 2019 alone, fintech-related deals accumulated over a billion SGD, far outstripping the amount of funding received in 2018 according to research from Accenture. This has been facilitated in part by the state’s favourable business ecosystem, which boasts low corporate tax rates, political stability, and low barriers to entry.

The nation has also made active steps to support fintech’s growth, suggesting a continued boom ahead. From 2015 to 2020, the Monetary Authority of Singapore (MAS), the state’s central bank, set aside S$225 million (US$165 million) to support fintech initiatives, a programme which has helped fund the nation’s turn towards fintech.

Since then, the number of fintech firms has rapidly climbed from only 50 to more than 600. On the back of this success, MAS has announced that it is likely that the programme will be renewed as of 2020.

Given its stated intentions to support a diversified range of fintech companies, it is wise to assume that there will be an increased amount of spending on the industry and a growing set of funds available for new and maturing startups.

Also Read: Indonesia, Singapore, Vietnam the most attractive fintech hubs in SEA: Study

What kind of initiatives has MAS launched to support the fintech industry? From 2015, MAS has taken a proactive stance in creating a favourable regulatory environment for businesses, emphasising innovation in tandem with security as well as supporting upcoming projects.

This was demonstrated in 2016 when MAS announced a regulatory sandbox for fintech companies to test their products in a live environment. This initiative has only expanded since – in 2019, MAS announced Sandbox Express to provide an even faster option for incoming players.

Its commitment to liberalising the fintech industry was further displayed in 2018, when it announced that it would issue up to two digital full bank (DFB) licences and three digital whole bank (DWB) licences, thereby opening up the banking sector to more players.

The country also boasts a highly skilled workforce favourable to incoming fintech entrepreneurs and the development of the market. This workforce is only set to grow —in 2019, the National University of Singapore (NUS) announced the opening of a fintech lab in conjunction with business and financial institutions.

This lab will be responsible for training the next generation of entrepreneurs and professionals. This development signifies the country’s commitment to expanding the labour pool available for upcoming fintech companies and bids good news for the booming market.

Singapore’s strategic location at the heart of the Malay peninsula has also made it an ideal location for leapfrogging into ASEAN markets. ASEAN markets offer a large pool of people who lack access to traditional financial institutions and would be well served by the development of fintech firms.

Also Read: Fintech company Achiko wants to help tackle COVID-19 with its new healthtech projects

An emerging theme of fintech in Southeast Asia is hence that of financial inclusion. For example, FinAccel, a successful fintech company based out of Singapore, is a credit lending company that caters to online shoppers in Indonesia, a group of people that have been historically underserved by traditional banks.

Beyond consumers, there is a similarly large pool of SMEs in Southeast Asia that have been underserved by traditional financial institutions, which lack the flexibility and deep data analytics provided by fintech companies.

Thailand is another prominent country in the region committed to developing its fintech industry. The Thai government inaugurated the Digital Economy Promotion agency in 2017 and has made supporting the fintech scene a priority since.

For instance, the country has since introduced three regulatory sandboxes which cover different aspects of the financial services industry. The nation also has one of the highest internet penetration rates in ASEAN, making it an ideal location for the fintech industry to blossom. Notably, the Thai Fintech Association has only expanded since 2016, with 66 out of 124 members being fintech startups.

Lightnet, an up and coming fintech company, is a shining example of the road ahead for fintech in ASEAN. Lightnet is a fintech company that leverages blockchain to provide remittance services across Southeast Asia, primarily targeted at unbanked migrant workers, allowing them to bypass high transaction fees and unreliable payment routes.

The company taps on both the flourishing scene in Thailand as well as the resources offered within Singapore: its headquarters reside in Thailand and it is registered in Singapore, allowing it access to the best of both worlds. In fact, it is a truly regional company—similar to FinAccel, Lightnet’s strength is that it offers a necessary and overlooked service to millions of unbanked people in Southeast Asia.

Also Read: Kim An raises Series A to connect Vietnam’s financial institutions with MSMEs via its fintech platform

Lightnet has benefitted from Singapore’s conducive environment for fintech players. In 2019, it received US$31.2 million from various investors in a Series A Funding Round. Its largest investor was that of United Overseas Bank (UOB) Venture Management, the private equity unit of UOB.

With this funding, the company will be able to increase its investment in the underlying blockchain technology its platform is built on, Stellar Network, and move forward with its first transactions in 2020. Lightnet’s vice chairman, Tridbodi Arunanondchai, has confidently predicted that Lightnet aims to facilitate over US$50 billion worth of annual transactions over the next three years.

As Lightnet moves into its next phase, it is likely that we will see a similar shift in the broader fintech funding environment in Singapore. In 2019, despite the rise in funding for fintech firms, the number of overall fintech deals actually decreased.

This is a result of the focus shifting from seed funding to series funding in tandem with maturing startups securing larger deals from investors. Over the next few years, we should continue to see a diminishing pool in seed funding and disproportionately larger growth in series funding as the market matures and bigger fintech companies consolidate.

Furthermore, it is also wise to expect a diversification away from payment start-ups over the next few years both in Singapore and in ASEAN more broadly. A report by (UOB) in November 2019 indicated that the fintech markets in Singapore and Thailand have been diversifying into insurance tech and personal finance, whereas in other ASEAN markets the focus is still largely centred on payment-related solutions.

Lightnet has cleverly tapped into this by expanding operations in Singapore, allowing it to capture the remittance needs of the broader Southeast Asian market while benefitting from Singapore’s encouragement of fintech innovation.

Lightnet provides a vision of what is to come in the future of ASEAN’s fintech industry: flourishing start-up scenes, an expanding regional market, and financial inclusion. Even as COVID-19 has heavily impacted national economies across the globe, it has nevertheless accelerated digitalisation globally.

Without a doubt, fintech is here to stay as leading players flourish in a world increasingly reliant on digital financial services.

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A group of Singapore-based tech entrepreneurs are raising funds to help daily wage workers in Indonesia during the COVID-19 pandemic.

It aims to raise at least S$10,000 (US$7,350) to buy food essentials –commonly known as sembako in Indonesia– to feed 200 families or more for a month.

The fundraising campaign is running for seven days and the group will be working with Solve Education, who will work with NGO partners to identify at-risk families and distribute the goods to.

Within less than 24 hours since its launch, the campaign has managed to secure more than half of targeted numbers.

Initiated by Goh Yiping (Partner at Quest Ventures), Janine Teo (Founder and CEO of Solve Education), Prantik Mazumdar (Managing Partner at HappyMarketer; MD, CRM Group, Dentsu Aegis Network), and Mohan Belani (CEO & Co-Founder at e27), the campaign was started as a response to Jakarta’s second lockdown.

While the movement is deemed necessary to tackle the COVID-19 pandemic, as the number of new cases in Indonesia peaked on September 25 with more than 4,800 cases in a day, there are concerns regarding the livelihood of daily wage workers in the country.

In a statement, the campaign pointed out that since the first lockdown in April, an estimated six to nine million workers have already lost their jobs. The government has predicted that there will be about 15 million people laid off nationwide until the end of the year, where daily wage workers will be severely impacted.

Also Read: Why COVID-19 isn’t slowing down this VC from helping businesses scale

Strengthening the ties between the two countries

In an email to e27, Goh explained the situation in more detail.

“A message to my previous Indonesian driver, Zainal … who used to drive me when I lived in Jakarta confirmed the hard truth. He has lost his job because there is almost no customer left to drive around anymore with the stopping of flights and people working from home. I have come to appreciate that millions of daily wage workers like him, who were already struggling to make ends meet pre-COVID-19 days, are impacted severely since the first lockdown in Indonesia,” she said.

“This new lockdown is a huge contrast to the reopening of Singapore where life is as normal as can be, except for masks and social distancing. Malls, restaurants, most importantly, jobs, are beginning to spring back to life. It is very hard for one to even imagine the extended lockdowns and increasing job losses in our close neighbouring country,” she continued.

Having worked, lived, and/or have extended relatives and friends in Indonesia, the group started the campaign with the goal to help the neighbouring country’s poorest population.

While they currently have no plan to create a follow-on campaign, they plan to distribute the donation in batches if they are able to raise more funds than targeted from this campaign.

“We hope everyone can donate generously to … Indonesia, of which many of us have come to live, work, and have friends and families in. As for our team, we hope to contribute back to the country we have come to call our second home in the last few years and to show our solidarity and support to our neighbouring brothers and sisters,” Goh closes.

To participate in the campaign, please visit this link.

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Image Credit: pisauikan on Unsplash

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Japan’s internet-based financial conglomerate SBI Group has partnered with Singapore- and Switzerland-based digital asset bank Sygnum to launch an early-stage fund, which will invest in digital asset possibilities across Southeast Asia and Europe.

Also Read: Return of the startups: These e27 Pro members are raising their seed funding round

These opportunities will primarily be focused on financial market infrastructure and enterprise solutions being developed for the emerging digital asset economy, as per a press statement.

Both partners expect to play an active role with the fund’s portfolio companies by enhancing corporate governance and providing business development and operational support.

They also intend to tokenise the fund structure in order to increase accessibility for investors and offer them the potential for greater liquidity post-investment.

“This fund expands the product offering for Sygnum’s clients, providing unique investment exposure to the innovation and growth in digital asset solutions,” said Gerald Goh, Sygnum’s Co-founder and Chief Strategy Officer. “At the same time, Sygnum is able to support and accelerate the growth and development of a trusted digital asset ecosystem by investing in the talent and opportunities in the space.”

Also Read: 6 ways digital assets can power Southeast Asia’s economy

Digital assets and the underlying distributed ledger technology (DLT) have immense potential to revolutionise the financial system and democratise asset ownership. While still in the nascent stages of development, the industry has seen exponential growth and increasing levels of interest from institutional investors.

As a hotbed of innovation, it is attracting many talented entrepreneurs looking to disrupt the status quo, and DLT-related global private investments have also increased almost seven times over the last five years.

Sygnum is a digital asset specialist with a capital markets services (CMS) licence for asset management in Singapore and a Swiss banking and securities dealer licence. It has also played a role in launching a number of Swiss digital asset-focused startups over the past two years.

Also Read: Ecosystem Roundup: Altara Ventures launches US$100M+ fund; Why Alibaba is planning to pour US$3B into Grab

The SBI Group is a leading global internet-based financial conglomerate. In addition, it is one of the largest Japanese private equity firms with AUM in excess of USD 4.2 billion. It has invested in more than 1,500 companies globally and leverages its extensive eco-system to further drive the value of its investments.

The group is a founding member of the Japan Security Token Offering (STO) Association and investor in the space, having invested in prominent DLT companies such as Ripple and R3. It currently has investments or overseas offices in more than 20 countries.

SBI Ven Capital is a VC firm that invests in financial services and technology sectors across Asia.

In September, Switzerland passed a wide-ranging legislation opening the door to cryptocurrencies and decentralised finance (DeFi), enabling companies to create digital shares, as well as a range of other tradable assets.

In comparison, Southeast Asia is still in the developing stages of the industry and has become the hotbed attracting many entrepreneurs and institutional investors.

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Image Credit: Unsplash

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FinTech Innovation Lab Asia-Pacific, a mentorship programme created by Accenture and run in Hong Kong, has announced the 10 startups selected for the seventh season.

Of these, three are from Singapore.

According to a press note, the 10 companies were selected from a total of 162 applications received from more than 30 countries.

Also Read: Tapping accelerator partnerships to fuel APAC growth

This year’s programme is based on five themes — data & analytics, digital bank solutions, emerging technologies, health insurance ecosystem, and intelligent automation.

Leveraging Artificial Intelligence (AI), advanced analytics, natural language processing and other technologies, the 10 selected startups have developed innovations designed to help financial institutions address a variety of challenges.

The 2020 programme formally kicks off this week and culminates in December when the participants will present their solutions at a virtual demo day to an audience of VCs and financial industry executives.

Also Read: Border-crossing and financial inclusion: The story of fintech in ASEAN

Below are the three Singapore firms that made to the list:

Symbo

It uses its proprietary platforms to digitise insurance distribution in partnership with insurance providers. Its mobile app helps insurers digitally engage with intermediaries, tied agents and financial advisors by simplifying insurance transactions.

Staple

Its cognitive AI-based solution helps reduce the costs of back-office operations, such as compliance and on-boarding checks. By combining computer vision, natural language processing, optical character recognition and machine learning, the solution can read, interpret and extract data from documents at scale, regardless of layout, format or language.

UVAS

A product of Atlant.io, UVAS is a securities exchange offering primary issuance of shares and debentures, secondary trading and optimised post-trade process, with automatic clearing, settlement and custody, all at 90-95 per cent cost savings compared to other exchanges.

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Image Credit: FinTech Innovation Lab

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Indonesia’s e-commerce giant Bukalapak has announced the launch of a new fintech and mutual funds selling unit, called Buka Investasi Bersama (BIB).

Also Read: Going big? Then Go e27 Pro.

The current offering is an extension of the financial services it has been providing since 2016, as per a statement. The company already runs BukaReksa, which also provides mutual funds services.

“In our journey of building an investment product since 2016, we learned that investment and financial services play a crucial role in creating a better life for individuals. We hope to provide accessible investment solutions for all, erasing the stigma that investment products are only meant for some parts of the society,” BIB’s President and CEO Teddy Oetomo.

Bukalapak stated that it aims to turn 500,000 of its users into mutual funds investors by 2021.

With its objective of making financial products easy, accessible and available to the underserved population, the firm has been collaborating with many companies to build leverage on an extensive local network of customers.

Last year, it also entered into a partnership with Axinan to provide digital insurance to its customers.

Also Read: Indonesia’s Bukalapak partners with Axinan to provide digital insurance

“We hope BIB will provide more accessible investment services for everyone and that it will debunk the old assumption that says investment services are only for a certain group of people,” Oetomo added.

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Image Credit: Bukalapak

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