Covid-19 helped expedite regtech ecosystem in Singapore: Enterprise Ireland report

THE Covid-19 pandemic has helped to expedite the growth of the regulatory technology ecosystem in Singapore, with regtech solutions prioritised as an immediate business need, according to a report by Ireland's innovation agency Enterprise Ireland.

The report noted that although progressive regulations, strong government support and the availability of talent and capital are cementing Singapore as a fintech hub with a maturing regtech market, the impact of Covid-19 has catalysed the development of its regtech sector.

This comes on top of the role played by the Monetary Authority of Singapore, which has established a robust and mature regulatory framework that supports industry development and innovation.

In addition, MAS has also shown real commitment to accelerating regtech adoption through the Regulatory Technology grant scheme and the Digital Acceleration Grant scheme, bolstering Singapore as an attractive market for global regtech players.

The report, titled "The State of Regtech in APAC", looks at regtech adoption in 10 key markets in the Asia Pacific region - Australia, Mainland China, Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

The global regtech market is projected to grow at a rate of over 20 per cent per year to US$16 billion by 2025, up from US$6.3 billion in 2020, with the APAC region expected to have the highest growth rate.

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This comes in tandem with the booming fintech scene in the region, said the report, particularly in South-east Asia which saw an estimated US$1 billion worth of investments in 2019.

In Singapore, digitalisation became a widespread necessity for organisations, as many were forced to adapt and survive the pandemic by moving away from legacy systems, according to the report.

Regtech solutions were also prioritised as an immediate need in the Republic's push for digital transformation through various government-sponsored grants.

"The willingness of government-led support is also matched by a deep instinct for market resilience in Singapore. While industry consolidation across Singapore's fintech and regtech sectors was already ongoing prior to the pandemic, the impetus for consolidation became more pronounced over this period," said the report.

Smaller players became further incentivised to partner with established ones to survive impact of the pandemic.

This means Singapore's regtech sector will increasingly sit within a more consolidated spectrum of fintech services, as industry players move towards providing end-to-end solutions in the market, said the report.

Tiarnan McCaughan, Enterprise Ireland's senior market adviser for Singapore, said the Republic is a strategic market not only to Ireland but to South-east Asia in particular.

"A global fintech hub with an extremely sophisticated regulatory regime, Singapore is a key gateway to the region and is often seen as a regulatory model for markets that are looking to drive innovation and regtech growth," said Mr McCaughan.