Singapore's fintech investments rebounded to US$278m in Q2: report

SINGAPORE'S fintech investments rebounded in the second quarter of 2020 to US$278 million, 4.1 times the US$68 million recorded in the first quarter, the Singapore FinTech Association (SFA) and management consulting firm Oliver Wyman said in a report on Wednesday.

From 2015 to 2019, about 65 per cent of fintech funding in South-east Asia was directed to Singapore businesses, nearly four times that of the funding received by Indonesia, the next-largest market.

This is further supported by a separate report by UOB, PwC Singapore and SFA released on Wednesday, which stated that almost two-thirds of 95 completed deals in Asean went to Singapore firms.

Investor interest in fintech firms based in the Republic remained strong, with these firms continuing to attach the highest funding amount (42 per cent) in the Asean region, the report noted.

SFA and Oliver Wyman's report said the Covid-19 pandemic resulted in a fall in overall fintech funding in Asia to US$2.4 billion in Q2, from US$3.13 billion in Q1. However, Singapore's funding landscape has been less volatile.

They said Singapore is the Asia-Pacific's top-ranking fintech city, with more than 40 per cent of South-east Asia's fintech firms based in the city-state. There are over a thousand fintech firms in the Republic as at 2020, 10 times that of the 100 fintechs recorded in 2015.

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The number of fintech employees has also exceeded 10,000 in 2020, compared with an estimated 1,100 staff five years ago. Moreover, the Singapore government has committed over US$200 million to grow the fintech ecosystem.

When it comes to sub-sectors, SFA and Oliver Wyman's report said payments and remittances companies made up 23 per cent of fintechs in the city-state, followed closely by wealth management and capital markets fintechs (22 per cent).

Similarly, UOB, PwC Singapore and SFA's report said alternative lending, payments and banking technology firms took the lead among fintech categories in Singapore.

Four in five Asean fintech firms will push ahead with expansion plans in the next two years despite disruptions caused by the Covid-19 pandemic, their report noted. The region is the top choice for market expansion for 78 per cent of these firms and also a top destination for 69 per cent of firms based outside of Asean that were surveyed.

SFA president Chia Hock Lai said there are good reasons for fintech firms in Asean to be optimistic about the future as Covid-19 has accelerated the adoption of digital finance by consumers and businesses.

For its research, SFA and Oliver Wyman surveyed more than 60 fintech firms - the majority of which are Singapore-based. They conducted more than 30 interviews with industry participants, from fintechs, investors, global technology companies, to regulators and industry associations, to name a few.

Minister for Trade and Industry Chan Chun Sing launched the SFA and Oliver Wyman report on Tuesday at the FinTech For Good 2020 event - organised as part of the Singapore Fintech Festival 2020. The report highlights the Republic's evolution as a centre for fintech innovation over the past five years and forecasts upcoming trends in the next five.

SFA's individual and corporate members collectively donated S$100,000 to the NTUC-U Care Fund under the FinTech for Good initiative. The U Care Fund provides financial assistance to lower-income NTUC union members and their families.