Singapore, 12 November 2019: Financial technology (FinTech) firms in Singapore continued to attract the lion’s share of global funding among ASEAN countries, and Singapore also tops the region as the preferred base of FinTech firms.
This is according to the “FinTech in ASEAN: From Start-up to Scale-up” report released by
United Overseas Bank (UOB), PwC and the Singapore FinTech Association (SFA).
According to the report, FinTech firms in Singapore continued to receive more than half (51%) of funding for the region, and Singapore is home to 45% of all FinTech firms in ASEAN.
Testament to the country’s push to encourage FinTech innovation across a broad range of areas, funding for Singapore-based FinTech firms was the most evenly distributed, with insurance technology, payments and personal finance leading the way. The diversified funding also indicates the country’s more mature FinTech landscape, compared with other ASEAN markets where the FinTech sector is still nascent and is largely focused on payment-related solutions.
Ms Janet Young, Head of Group Channels and Digitalisation, UOB; Ms. Wong Wanyi, FinTech Leader of PwC Singapore; Mr. Chia Hock Lai, President of SFA; Mr. Charles Wong, Chairman and Co-Founder, Prive Technologies; Mr. Kelvin Teo, Chairman and Group CEO, Funding Societies and Mr. Rueben Lai, Senior Managing Director, Grab Financial Services, together launched the report at Singapore FinTech Festival x SWITCH 2019 on Tuesday (Nov 12).
Ms Janet Young said that, “Singapore’s favourable regulatory and business environment, strong investor interest and maturing FinTech sector continue to make it an attractive base for firms that are looking to tap ASEAN’s growth potential. As such, more firms in the country have also graduated from pre-series to later-stage funding.
“However, expanding into and within one of the world’s most diverse regions is not plain sailing. Therefore, in order to increase their chances of success, it is important for FinTech firms to find the right partner to supplement the experience, insights and connections required to navigate the differing regulatory frameworks and operating landscape across ASEAN.”
Businesses were the main target customer segment for FinTech firms (79%). Among businesses, financial institutions made up half (50%) of the target segment, followed by corporates (17%) and small- and medium-sized enterprises (12%). Consumers and start-ups made up the rest of the target segment (21%).
As most financial institutions and corporates tend to require multi-level approvals across different stakeholders, FinTech firms need to be prepared for a longer lead time before sealing the deal and onboarding these clients. FinTech firms offering business-to-business solutions should therefore ensure that they have a longer funding runway to meet their operating expenses.
The report also found that FinTech firms in ASEAN are generally optimistic about their current and future funding needs, with almost half of those surveyed confident of raising more than US$10 million for their next funding round.
Ms Wong Wanyi, FinTech Leader, PwC Singapore, said, “This optimism is not surprising, given the promise that the ASEAN region brings and the liberation of the industry through digital banking licenses. The increasing penetration of mobile devices coupled with the capabilities of new innovative technologies have made FinTech firms a key driver in this evolving ASEAN financial services landscape, providing an experience that is easier, faster and more convenient. That being said, the FinTech scene is very competitive so FinTech firms should be focused and have a clear value proposition. Scaling up should be at the right pace and for the right reason.”
Talent remains a challenge, with 58% of FinTech firms surveyed indicating that this was an inhibitor to their regional expansion plans.
Mr Chia Hock Lai, President, SFA, said, “FinTech firms need to consider if there is suitable and abundant expertise at the location they have chosen to scale their business. Given the long time it takes to hire the right talent, firms must plan ahead when it comes to expanding their workforce and business in a new market. One way that some firms overcome this challenge is to hire local talents at least six months ahead of their expansion into a new market.”