Though business models and technology were all discussed and reviewed during the tour, I will share some of the most interesting points that I took away related to how the government and corporations in Singapore are promoting the fintech innovation.
The government is doing a lot to catalyze the fintech growth. First, many of the Singapore industry experts we met mentioned the fintech innovation department established by the Monetary Authority of Singapore (MAS). The department's primary goal is to communicate with businesses and learn their opinion on what's regulatory actions should be implemented to drive the fintech innovation. Direct communication of the regulators with the corporate sector is riskier as it might tempt the illegal behavior, but having a layer in between the regulators and business is a good way to ensure an efficient information flow and to keep the integrity of the regulators.
At the same time the Singapore government is providing the financial support for many of the initiatives, for example subsidizing office leases. The Singapore branch of Startup Bootcamp's accelerator that we visited was able to rent its office space at reduced rates because the building was designated by the government as a fintech hotspot. Not to mention that the Fintech Festival itself was organized by the MAS and the Association of Banks in Singapore, making the scene even more vibrant in addition to the existing events like Money 2020 that are lead by private entities.
Actually, after a very intense week of meetings it felt like everyone in Singapore is establishing something related to fintech innovation. All major banks, all of the big four audit consulting firms, Visa and Mastercard, all either have established or are in the process of launching fintech innovation labs and facilities. The logic behind this, as we found out from visiting the DBS Innovation Lab and talking to Visa, is to bring in-house and outside talent to stir the creative spirit, that otherwise might be lacking in large corporations.
Still, the sheer number of such spaces might even seem excessive - is there a need for 20+ innovations labs in Singapore? Are there enough startups to fill the space? The logic behind innovation labs is similar to that of angel investing - small resources are spent on a number of startups, and one successful startup will make all the investment worthwhile. Though the difference with angel investing, in this case, is that the startup will not continue to grow independently, but will be integrated into the corporation. With regards to the number of innovation labs, though not all of them will successful, giving it a try is cheap enough for the big firms to justify the investment.