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Singapore’s economy advanced just 0.5% in the third quarter of 2019 compared to the same period the year before. With that said, driven by a robust demand for payment processing services, the finance sector has actually bucked the trend with an expansion of 4.3% year on year. Moreover, this sector now accounts for about 13% of the city-state’s gross domestic product and employs close to 200,000 people, or 5.3% of the workforce.
These healthy statistics have set the stage perfectly for Singapore’s fintech industry to grow in 2020. Already, there are more fintech companies in Singapore than there are in Hong Kong. In the first nine months of 2019, fintech companies in Singapore raised a record US$735 million, according to a report by Accenture. The total value of fintech deals from January to September 2019 was a 69% increase from US$435 million in the same period last year.
This hive of activities and positive sentiments have clearly emboldened fintech companies in Singapore. In an August report by Singapore Fintech Association and PwC, 94% of fintech companies indicated they were planning to expand their workforce over the next 12 months, and 28% expected to double the headcount in the next three years.
“Increased activity in many markets is a good indicator of the level of confidence many investors have in the fintech industry,” said Piyush Singh, a Managing Director at Accenture who leads its Financial Services practice in Asia Pacific and Africa.
With the introduction of close to 1,000 new fintech companies into the marketplace, the importance of a robust regulatory framework becomes even more in focus. The Association of Crypto-Currency Enterprises and Startups Singapore has taken the lead by issuing a public invitation to give feedback on its newly developed practices aimed at promoting best practices to strengthen regulatory compliance for the digital asset industry.
Sopnendu Mohanty, Chief Fintech Officer of the Monetary Authority of Singapore (MAS) said that this industry collaboration will help promulgate good practices for fintech players and financial institutions to manage risks, such as money laundering and terrorism financing in crypto and blockchain, and set the foundation for further technical development and broader industry adoption of innovative technologies.
Singapore’s central bank is also stepping up its efforts to strengthen the sector’s defence against rising threats. From August 2020, all financial services and e-payment firms in Singapore must follow a set of cyber hygiene rules. This makes MAS the first financial authority in the world to mandate cyber-hygiene. A new Payment Services Act will also be in effect by January 2020 and will contain new measures to better balance risky user behaviour with the potentially large losses that financial institutions are exposed to.
The tightening of regulations is being matched with continued initiatives to encourage innovation. MAS recently launched the Sandbox Express to provide firms with faster ways to test innovative financial products and services in the market. Eligible applicants can begin market testing in Sandbox Express within 21 days of applying to MAS, instead of a longer time-frame under the existing FinTech Regulatory Sandbox.
“For innovation to take root, it is important for ideas to be tested quickly and in a safe environment. Sandbox Express aims to achieve this through appropriate disclosures and pre-defined rules. This introduction of Sandbox Express builds on the experience we have gained from running the FinTech Regulatory Sandbox and reflects our commitment to encouraging more experimentation and greater adoption of innovative technologies in the financial sector,” said Mohanty.
Late 2018, MAS, Deloitte and S&P Global Market Intelligence announced a collaborative project to develop a prototype for an industry-wide fintech research platform to help investors and financial institutions connect with potential fintech start-ups that they can partner with or invest in.
With these factors in play, the outlook is relatively positive for Singapore’s financial sector in 2020.
That is the case in the recruitment space as well. Our latest Salary Benchmark report for 2020 predicts that Singapore will continue to be the city of choice for PEs, VCs and hedge funds looking to expand in the Asia Pacific. Financial Services and fintech, in particular, are areas that will see the most hiring activities.
In terms of specific roles, Accountants, Compliance Managers, Credit Risk Analysts and Know Your Customer Analysts. With the rise of fintech comes a heightened demand for Software Developers also, especially those with expertise in different transaction platforms, digitisation, AI and analytics.
Overall, the careful planning by the government and collaborative efforts of the public and private sector seem to be in place to ensure the financial sector in Singapore remains on track to stay atop the region and even globally.
With more than 40 years of experience and 140 offices globally, PageGroup has one of the most comprehensive networks of employers and candidates in the financial services industry. This article is part of our Market Movers series, which attempts to highlight various industry segments across specific markets.
Visit Market Movers now for even greater insights.
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