The Singaporean financial regulator, Monetary Authority of Singapore (MAS) has announced that it will commit S$250 million (US$180 million) over the next three years to help accelerate innovation and technology adoption in the financial services sector, per a press release.
With the newly allocated capital, MAS will double the maximum funding per Fintech under the Proof-of-Concept (POC) Grant from S$200,000 ($145,882) to S$400,000 ($291,765).
This will allow Fintechs to complete larger POCs to experiment and develop new solutions.
Additionally, the funding for qualifying AI (artificial intelligence) projects under the AI and Data Analytics Grant will be increased from S$1 million (US$700,000) to S$1.5 million (US$1.1 million), helping to accelerate AI development.
It will also be used to co-fund existing innovation labs for new hires, among other things.
This effort is part of a slew of other projects in Singapore to boost its Fintech sector, showing continued commitment from regulators and industry bodies to enhance the ecosystem.
Meanwhile, MAS recently rolled out a funding package to support banks and Fintechs, drive growth across the financial services sector, and help them better navigate the negative effects caused by the coronavirus pandemic.
Additionally, the Singapore Fintech Association and Razer Fintech are collaborating to better help local Fintechs withstand the negative impact of the pandemic by addressing issues including business continuity, lack of funding, and brand awareness.
Supporting Fintechs is especially important during the pandemic — and initiatives from regulators and industry bodies will help Singapore to defend its position as global Fintech hub.
While Fintech funding picked up in Q2, reaching $9.3 billion after a drop in Q1 caused by the pandemic, largely established players are scooping up funding rounds, per CB Insights, meaning smaller players could benefit from regulatory initiatives like this one.
At the same time, Singapore’s Fintech funding hit S$462 million ($337 million) in the first six months of this year ending June 15, a 19% increase from the same period last year, indicating continued resilience of the Singaporean Fintech ecosystem.
The continued support from regulators and industry bodies in combination with the city-state’s high fintech adoption rate among digitally active consumers — 67% compared with the global average of 64%, per EY — will help Singapore fintechs to further accelerate growth, and help the city-state to continue being a global Fintech hub.
It is very obvious that the banking sector globally is moving very fast into becoming technology-based as opposed to the traditional brick and mortar and manual banking.
Governments around the world are not sitting by and allowing the new phenomenon to just grow on the fringes. They are quickly being mainstreamed to form a core part of the banking sector and of national development.
Particularly in Europe and America the financial technology players have been named Neobanks and regulators are piloting the industry in a way that gives them a central role, and some traditional banks were apprehensive initially, but are gradually coming along.
In Ghana, the current government is holding its own in creating the enabling environment the for financial technology to blossom, with Mobile Money leading the charge. Mobile Money licenses used to be given to banks to collaborate with telecom operators, but now the license goes to the telcos and the banks become partners.
Since the change, telcos now give customers interest on the balance in the mobile money wallet because the cash in the balance is now available to the telcos for investment and profit, so the can pay interest.
Added to that, the Vice President of Ghana, Dr. Mahamudu Bawumia led the charge to establish the mobile money interoperability platform that allows a suit of cross network transfers – mobile to mobile, bank account to mobile and mobile to bank account, and that has boosted interest.
More so, mobile money allows users to make investments in treasuring bill, buy insurance policies and also take soft loans. Alongside all that, there are loads of payment platforms like Expresspay, Hubtel, Easypay, Etranzact and others, who collaborate with banks and telcos to make FinTech industry tick.
The investment is paying off but there is need to take a cue from Singapore and push harder to really mainstream FinTech, but government itself adopting the FinTech platforms for payments. It should not be left for individual state institutions to collaborate with the FinTech, like ECG, Ghana Water does. Government must lead the charge from the centre and ensure that many more state institutions connect with FinTechs to give user a wide range of choices.
Government should also assist the FinTech to increase their capacities and do more. Currently almost all the FinTechs in Ghana are still at start-up level. That is very instructive.